Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENERGY

London Electricity Board

Mr. Cox: To ask the Secretary of State for Energy when he last met the chairman of the London electricity board; and what issues were discussed.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): My right hon. Friend and I meet the chairman of the London electricity board regularly and discuss a range of issues of mutual concern.

Mr. Cox: I note that reply, but the Minister must be aware that over many years hon. Members have conducted a campaign with the electricity board, aimed at achieving a more humane and consultative policy to be followed before disconnection of electricity supply. Will the Minister assure the House that, once the industry is privatised, and other organisations are running domestic supplies to consumers, a policy of proper consultation before disconnection of supply will be followed?

Mr. Spicer: Yes, Sir. I can give the hon. Gentleman the assurance for which he is looking. When the industry is privatised under the terms of the Bill that we shall be discussing later, special provisions of the kind that he requests will be put in place, and conditions will be attached to licences given to public electricity suppliers.

Mr. Harry Greenway: When my hon. Friend meets the chairman of London electricity board, in addition to the important point made by the hon. Member for Tooting (Mr. Cox), will he discuss the need to ensure that all lights in London streets, particularly main roads, are on whenever it is necessary? Is my hon. Friend aware that the lighting in the area of the Target roundabout has gone off or failed many times in the past three or four years, despite my repeated requests that it be kept on?

Mr. Spicer: I was not aware of the Target roundabout problem, but I take my hon. Friend's assurance that there is a problem there. There has been some concern about street lighting connections in the LEB area, but that problem has greatly improved in recent months. Under privatisation, local authorities will be able to contract elsewhere when they wish to do so.

Severn Barrage

Mr. Stern: To ask the Secretary of State for Energy what assumptions he made as regards availability of pumped storage and capacity in his evidence to the Energy Select Committee in arriving at the conclusion that a Severn barrage could amount to 14 TWH/year of electricity.

The Minister of State, Department of Energy (Mr. Peter Morrison): The assumptions derived from the previous published study by the Severn tidal power group. These are being updated in the current study, which will be published in a few months' time.

Mr. Stern: I am grateful to my right hon. Friend for that reply. How confident is he of the accuracy of the predictions on which the study is based? Will he ensure that not only the conclusions of the study, but the scientific data on which they are based, will be published?

Mr. Morrison: As I said, the assumptions derive from the previous study. Another study is taking place and the figures produced in the interim report— it is only an interim report— on the Hinckly inquiry were a little more than the figures that I gave. which were 14 TWH per annum. That is interim, and I shall certainly publish what my hon. Friend has asked for.

Electricity Privatisation

Mr. Cran: To ask the Secretary of State for Energy what studies have been undertaken by his Department as to the effect of privatisation of the electricity industry on the production of electricity from all other energy sources.

Mr. Michael Spicer: We have framed our privatisation proposals to encourage competitive generation from all sources.

Mr. Cran: Does not recent experience show that the use of fossil fuels in the production of electricity is susceptible not only to interruptions of supply but to variations of price? That being so, should not the non-fossil fuel obligations be used to the maximum after the Electricity Bill is enacted, and reviewed constantly thereafter?

Mr. Spicer: I agree that there have been disruptions in the supply of coal as a result of strikes and variations in the price of oil. That is why we have ensured, through the. non-fossil fuel obligation, that a variety of sources of energy will be available, with resulting security for the consumer. We have particularly ensured that renewable sources of energy will be given a special place within the non-fossil fuel obligation.

Mr. Campbell-Savours: Is privatisation a consideration in the mind of the Central Electricity Generating Board in pursuing its planning application for dry storage at Heysham? Does it think that that is cheaper than reprocessing? Will the Minister personally intervene? We want the material in west Cumberland, where it can be reprocessed by British Nuclear Fuels plc. Is the Minister aware that the people of the Heysham area object and that we in west Cumberland want the material?

Mr. Spicer: I am not inside the CEGB's mind. As the hon. Gentleman said, it is applying for dry storage at Heysham. He is right to say— perhaps we shall be discussing this in greater detail later in the week— that


there are advantages attached to the processing which is proposed at the thermal oxide reprocessing plant in terms of the recovery of uranium and the development of plutonium. However, there must be an application and an inquiry before we can go ahead on that basis.

Mr. Jack: Does my hon. Friend agree that British Nuclear Fuels plc is working hard to take full advantage of the opportunities for nuclear power generation under the terms of the Electricity Bill? Will he join me in congratulating both the management and the unions on the agreement recently struck, which will further the exploitation of BNF's new investment programme at the Springfield works in my constituency?

Mr. Spicer: I am happy to join my hon. Friend in those congratulations. I hope that British Nuclear Fuels plc will continue to be successful.

Mr. Morgan: Does the Minister agree that the supplementary question by the hon. Member for Beverley (Mr. Jack), and his answer to it, constitute the most astonishing question and response that one can imagine from a supposedly market-oriented Government? Is the Minister able to confirm that the advice that he is receiving from the merchant banks that are advising him on privatisation is that the private investment community does not want to know about nuclear power and will not pay genuine money for it? Whereas it might be possible to sell the family silver, the Government cannot even give away the family plutonium.

Mr. Spicer: No, Sir. I do not accept that for one moment. When it comes to the establishment of the contracts for the future of the nuclear industry, we shall ensure that they allow for investment incentives and ensure that the consumer has a good deal. There is no question of it being an unattractive proposition financially to sell the industry, especially in the context of the non-fossil fuel obligation.

Wave Energy

Mr. Macdonald: To ask the Secretary of State for Energy what further funding he proposes to provide for the next stage of research into Dr. Stephen Salter's wave energy project.

Mr. Peter Morrison: There are no current plans for additional funding for this project.

Mr. Macdonald: Nevertheless, will the Minister undertake to ask the technology support group at Harwell to reconsider the feasibility of Dr. Salter's project? With the benefit of hindsight, does the Minister agree that it was a mistake for the Government to cut off funding for wave energy projects in 1982? Surely Britain should be taking the lead in wave energy development and not allowing countries such as Norway to gain export orders on the back of British know-how.

Mr. Morrison: The hon. Gentleman will know that Dr. Salter has been in correspondence and has had meetings with my noble Friend the Under-Secretary of State, who is specifically responsible for such matters within the Department. He will realise that since 1983, about £446,000 has been spent on Dr. Salter's project. I do not

believe that there is currently a specific application. Were there to be one, that would be considered in the light of all the other competing priorities.

British Nuclear Fuels

Mr. Campbell-Savours: To ask the Secretary of State for Energy when he last met the board of directors of British Nuclear Fuels; and what matters were discussed.

Mr. Michael Spicer: My right hon. Friend and I regularly meet the chairman and other board members to discuss a wide range of matters.

Mr. Cambell-Savours: When the Minister next meets the chairman and the board, will he put to them that they should take a particular interest in the development of nuclear fission as outlined in the articles by Fleischmann, Pons and others, including Jones in America, and ensure that every effort is made to make resources available for further development of the process? If necessary, moneys should be diverted from the Culham, Oxford laboratories, which are currently undertaking work and which have a substantial sum at their disposal, into a new area of work that may herald a new energy source for the future.

Mr. Spicer: I shall certainly draw the hon. Gentleman's comments to the attention of the chairman and the board. I am sure that they will take a close interest in the experiments and will monitor the results, but British Nuclear Fuels is responsible for reprocessing rather than for initial generation.

Mr. Salmond: Does the Minister accept that the additional charges by BNFL to the Scottish electricity boards over the past few years amount to £250 million for the extra costs of reprocessing fuel and the breaking of the Chapelcross contract? What is the Minister's estimate of the impact of these huge additional charges on Scottish electricity bills this year and in future years?

Mr. Spicer: It is certainly the case, and the Government's policy, that British Nuclear Fuels should charge an appropriate cost-related price for its service and that the consumer will ultimately have to pay for those proper costs. Under our proposals, particularly our privatisation proposals in the Electricity Bill, those costs will be much more transparent than in the past, when they have often been disguised.

British Coal

Mr. Janner: To ask the Secretary of State for Energy when he last met the chairman of British Coal; arid what matters were discussed.

Mr. Hardy: To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what matters were discussed.

Mr. Michael Spicer: My right hon. Friend and I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

Mr. Janner: Has the Minister discussed with the chairman of British Coal the deep anxiety of Leicestershire's stalwart, skilled coal miners at the steady loss of jobs for miners in the county and the east midlands? Has the hon. Gentleman considered, either with the chairman of British Coal or alone, the Government's


promise even before the last general election to build a coal-fired power station at West Burton, thereby creating 3,000 jobs for coal miners in the area? Is it right to say that nothing has happened? If so, why?

Mr. Spicer: It is not right to say that nothing has happened. The CEGB has filed an application. It must get the approval or disapproval of the planning authorities. As I understand it, discussions are going on between the two appropriate planning authorities—the district council and the county council. I understand also that the one outstanding issue looks as though it will be resolved. If it is, it will be for my right hon. Friend the Secretary of State to determine whether he wants to hold a public inquiry. The process of applying for that power station is well advanced. Until my right hon. Friend can proceed with his consideration of the application, I must hold his position in reserve.

Mr. Hardy: Will the Minister discuss with the chairman of British Coal the need to extend the perception of the conquences of developing coal import dependency, not least through increased coal prices? Would the hon. Gentleman care to express his support for the retention of British Coal's science laboratories at Wath upon Dearne, an area which has suffered severe contraction, where economic need is dire and where this establishment is needed as a signpost for technological development?

Mr. Spicer: British Coal is increasingly aware of the need to be competitive against imports and also of our view that it will be able to compete against imports if the present procedures for improving productivity are maintained.
The hon. Gentleman was good enough to give me notice that he wanted information about the laboratories to which he referred. This is a matter for British Coal, but my understanding, in the short time available to find out about this matter, is that there is no problem about the laboratories' future. If my understanding is incorrect, I shall write to the hon. Gentleman.

Mr. Andy Stewart: When my right hon. Friend the Secretary of State last met the chairman of British Coal, did he reassure him that on his visit to Russia he would say that we no longer wanted Russian coal in Nottinghamshire and that, it was no more welcome than that from South Africa?

Mr. Spicer: I do not think that any imports are welcome. The question before the Government is whether to allow imports in the interest——

Mr. Blair: What?

Mr. Spicer: I said that no imports would be welcomed by the Government. The question before the Government is whether to allow imports in the interest of bringing prices down, especially prices of electricity to the consumer. We have made it clear that we will allow coal imports. We have also said that with £2 million a day being given in investment to the coal industry, we have done a tremendous amount— more than any other Government — to improve the productivity of the coal industry. If productivity increases at the present rate, British Coal should be able to beat off imports.

Mr. Batiste: My right hon. Friend the Secretary of State has already announced his intention that the coal industry

should be privatised after the next general election. Can my hon. Friend give a timetable against which the discussions and deliberations will take place, which will lead to decisions about the shape of that privatisation and, in particular, the need for competition in it?

Mr. Spicer: No, Sir. We have said that it is a matter that we want to put to the British people at the next general election and we do not wish to prejudge their decision. We shall have to make decisions about details in precisely the same way as we did with electricity. We shall make a commitment to privatise coal at the next general election. but the shape and content of that privatisation will have to wait until after the election.

Mr. Jack Thompson: At the next discussions with the chairman of British Coal, will the Minister take the opportunity to raise with him the question of the British Coal engineering workshops? The rundown in manpower and the dilution of skills in the workshops is having an effect on the efficiency and, especially, the safety of the industry. Are there any plans to take out the engineering workshops before any proposals are made to privatise the industry?

Mr. Spicer: The future of the workshops is a matter for British Coal. However, I shall ensure that the hon. Gentleman's comments are drawn to the chairman's attention.

Mr. Gow: Did the chairman of British Coal confirm to my hon. Friend at their last meeting that there was growing interest and support among miners for the proposal to privatise the industry? Did the chairman report that miners, notably in the Bolsover constituency, were looking forward to becoming owners of the mines?

Mr. Spicer: That point was not discussed in those terms with the chairman of British Coal by my right hon. Friend or myself. However, I can confirm to my hon. Friend that it is most probable that the employees of British Coal will be as enthusiastic about becoming owners of that industry as the employees of all the other industries that have been privatised.

Mr. Skinner: rose

Mr. Speaker: Yes, all right.

Mr. Skinner: Is the Minister aware that, when I was going through my reselection procedures in the past few weeks, not one miner or representative mentioned. ownership or privatisation? They were more concerned that I, along with my colleagues, should make it plain that the Government should stop the chicanery of backing those private Bills which will allow the import of more coal through the Humber ports. If the Government do that, they will be able to stop some of the imports that the Minister wants to stop.

Mr. Spicer: The hon. Gentleman did not tell us whether he won his reselection, but the implication is that he did. Presumably, he meets different people from those whom I meet, or perhaps people tell him different things. I can assure him that there is every sign that, when we privatise the industry, it will have a great deal of support among those who work in it.

Mr. Holt: Does my hon. Friend care to say whether he discussed with the chairman, British Coal's appalling


record in polluting the beaches of north-east England and the rather benign statement that British Coal cannot do anything about it? Does he agree that British Coal must learn to clean up its act?

Mr. Spicer: I am very much aware of that problem and that British Coal is under increasing pressure to do something about pollution in that part of England. I shall write to my hon. Friend with details, but I understand that there are specific plans on that question which should be coming to fruition.

Mr. Barron: When the Minister and the Secretary of State met the chairman of British Coal, did they discuss the implications of the imports of coal that are likely to come through the Humber ports, the threat to the midlands coalfields posed by the Bills for the Humber ports and the report recently received from members of the Standing Committee that one Bill went through by the Chairman's casting vote? They said that the implications for the coal industry are horrendous and that the Government should take action to protect our indigenous coal industry. When shall we receive a statement from the Government that they are not going to let the wool be pulled over their eyes by cheap subsidised coal but are going to take some action to protect the coal miners in the midlands?

Mr. Spicer: When one is a member of a Government who are still spending £2 million a day of taxpayers' money on the coal industry, one has to be a little careful on the question of subsidy. That is precisely what we are being at the moment— to counteract the undoubted threat of imports, which we recognise and for which we have allowed, by continuing with the process of improving the productivity of British coal. We have good coal and a good industry which should be able to compete against imports, and that is the way we believe it will be in the future.

Pressurised Water Reactors

Mr. Dalyell: To ask the Secretary of State for Energy what information he has about technical problems and cost over-runs experienced in the construction and operation of the pressurised water reactors managed by the Brazilian utility Electrobras and about related transmission problems; and what assessment he has made of their implications for the robustness of the case for adopting a programme of generally similar reactors in the United Kingdom.

Mr. Peter Morrison: I am aware that Electrobras does have some problems with its PWR programme. The CEGB is confident that PWRs built in this country will operate satisfactorily.

Mr. Dalyell: If only because those who want to prevent significant flooding in the Amazonian rain forest have a duty to say where the electricity and power will come from if not from dams, may I ask the Minister if we are in a position to help Brazil and to co-operate with the nuclear power programme between Sao Paulo and Rio? On the question of transmission, has any assessment been made of the difficulties in superconductivity of transmitting energy over a distance of 2,000 miles?

Mr. Morrison: I know that the hon. Gentleman feels very strongly about this matter. When I went to Rio de Janeiro I met the president of Electrobras, and during that

meeting we discussed many matters and I suggested that it might be helpful if, when he was next in London, he found the opportunity to talk to our electricity division and to the energy efficiency office. In his second point about transmission, the hon. Gentleman put his finger on the key element— that the vast distances involved in Brazil, as compared with those in this country, for example, mean that there are inevitably difficulties of a different order.

Mr. Moss: Can my right hon. Friend confirm that the faulty equipment referred to in the question about the Brazilian utility is French? Does not that endorse the CEGB'S preference for Westinghouse American technology rather than French technology?

Mr. Morrison: My hon. Friend is absolutely correct. Brazil and other countries should look very carefully indeed at the sort of technology and experience that we have been able to develop here, in conjunction with other countries.

Redundant Miners

Mr. Skinner: To ask the Secretary of State for Energy, further to his answer of 27 February, Official Report, column 5, if he will now indicate what measures he will take to resolve the problems created by the restart scheme for redundant miners; and if he will make a statement.

Mr. Michael Spicer: I am now able to confirm that it is our intention to introduce an amending order to modify the redundant mineworkers payments scheme such that receipt of benefits under the scheme will no longer be conditional upon the beneficiary making himself available for work.

Mr. Skinner: I think that the next question must be when will that amendment be brought before the House to ensure that officers at unemployment and social security departments throughout the British coalfields are instructed to stop the harassment that has been taking place? Will the Minister also guarantee that, in the amending legislation, provision will be made for those miners who have lost money— in some cases more than £l,000— to be paid back retrospectively?

Mr. Spicer: Yes, Sir. We intend to take powers to recompense those former mineworkers who have lost RMPS benefits due to changes in the availability for work procedures. The hon. Gentleman was ungenerous enough not to admit it, but employment offices have been careful in the way in which they have dealt with the redundant mineworkers payments scheme.

Mr. Beith: I welcome the Minister's decision and the efforts that Energy Ministers have put into securing the decision. Will he recognise, however, that the Department of Social Security and the Department of Employment between them have made an absolute mess of the scheme and have caused a great deal of anxiety to men who were told, when they left the industry, that they were doing it a favour by taking retirement when they did and that they were helping to restructure the coal industry? Does he agree that, this decision, though overdue, is welcome?

Mr. Spicer: The hon. Gentleman is wrong. The miners were made aware at the time— in the pamphlet issued by British Coal— that availability for work would be one of


the criteria by which they would continue to qualify for RMPS payments. That was always clear; it was never in any doubt. We are amending the rules in the light of the stricter rules accompanying restart. That is all. There was never any question but that they would have to be available for work.

Mr. Eadie: We should be extremely churlish if we did not welcome the Minister's statement. Is he aware that we are glad that he has told us that any proposed legislation will be retrospective? However, will he accept that when the miners parliamentary group met the Secretary of State for Energy and the Minister of State, Department of Employment, we were given an understanding that there would be a sort of ca' canny and no harassment of miners who were involved in what was really a Government error? In view of the hon. Gentleman's statement today, will he assure the House that he will instruct the Departments involved that there should be no more harassment of redundant mineworkers? I heard of two cases this weekend that are an absolute disgrace.

Mr. Spicer: I should very much like to hear from the hon. Member for Midlothian (Mr. Eadie) about the two cases. There is every intention that such cases should be treated as lightly as possible and that the miners to whom he is referring should not be harassed, to use the hon. Gentleman's word— I do not think that "harassment" is exactly the right word to use. However, if there are any cases with which he has problems, I shall be happy to hear from him.

Mr. Batiste: Is my hon. Friend aware that whatever the technicalities of the documentation, many miners, especially elderly miners, genuinely believed that they would not be required to re-offer themselves for work and therefore there will be the warmest welcome from hon. Members of all parties for what he has announced? We hope that legislation will be introduced as speedily as possible.

Mr. Spicer: My hon. Friend is right in that there was the perception among some miners that they would not have to be available for work and that they had received some kind of retirement payment. However, leaflets were produced which made it quite clear that they would have to be available for work— the majority knew that— and that has been part of the problem with restart. I take my hon. Friend's point and thank him for what he has said.

CEGB

Mr. Radice: To ask the Secretary of State for Energy when he next expects to meet John Baker, the chief executive of the Central Electricity Generating Board; and what matters will be discussed.

Mr. Michael Spicer: My right hon. Friend and I regularly meet senior members of the Central Electricity Generating Board, including Mr. John Baker.

Mr. Radice: Will the Minister tell the House about an important issue that has arisen from discussions that he might have had with Mr. Baker— that is, the latest estimate of the costs of the flotation of electricity supply industry shares?

Mr. Spicer: No, Sir. Never have any Government made that sort of information available, especially before the

enabling legislation has passed through the House of Commons. It would be wrong of us to get estimates and to go into deep preparations for flotation campaigns before Parliament has finally passed judgment on the Bill that would enable us to do so.

Mr. Rost: Will my hon. Friend seek assurances from the chief executive of the CEGB that the privatised generation companies will not inhibit competition by continuing to hoard the 100 or more redundant power station sites that the CEGB has not been interested in redeveloping or refurbishing, but which the private sector is keen to develop with new technologies for the smaller power stations which have planning approvals because it will be difficult to find sites for competitive power stations unless we use those that we already have?

Mr. Spicer: My hon. Friend makes an extremely good point. We have made flexible provisions for compulsory purchase by private power companies should they wish to take over the land that has not been used by the existing operators. I shall ensure that my hon. Friend's words are widely heard.

Mr. Blair: Does the Minister agree that if the costs of selling electricity are the same as those for gas and British Telecom, we are talking about £25 for every household in the country and when that is added to higher prices, to a special nuclear tax and to uncertainty even about security of supply, it is no wonder that the vast majority of people in this country oppose privatisation?

Mr. Spicer: The hon. Gentleman is giving us an overture to what will no doubt be his speech at the beginning of our Report and Third Reading debates later today.
This is the biggest privatisation of all time— and quite rightly so. Many consumers will benefit, and there will be a much increased number of shareholders. One of the Opposition Front Bench Members said that he hoped that the privatisation would be properly undertaken. I can assure the hon. Gentleman that it will be properly undertaken and that there will be a proper campaign to promote it.

Mr. Malcolm Bruce: Does the Minister recall that during the Report stage of the Electricity Bill his right hon. Friend the Secretary of State said that a new code of practice on disconnections would be brought before the House, or at least would be notified to the House, before that stage of the Bill had been completed? Can he tell us what has happened to the code of practice, and when we are likely to hear the details of it?

Mr. Spicer: I hope very much that we shall be able to bring the code of practice forward before the House has finished its consideration of the Bill. I shall have to refresh my memory, but I think that that is what was said. Certainly it is what we shall try, to do.

Severn Tidal Power Group

Mr. Tony Banks: To ask the Secretary of State for Energy when he expects to receive the final report of the Severn tidal power group.

Mr. Peter Morrison: The study by the Severn tidal power group is nearing completion, and I expect to receive a final report within the next few months.

Mr. Banks: While talk of the Severn barrage is not exactly the matter of the moment in pubs in Newham, a good renewable energy source certainly is. Tidal power presents precisely that prospect. Will the Minister say whether the Government are committed in principle to the idea of tidal power? When the report has been received, and before any of the recommendations are implemented, will he make sure that the interests of both Welsh miners and redshanks are well protected?

Mr. Morrison: I am sorry that tidal power is not the chat of the pubs in Newham; I can assure the hon. Gentleman that it is the chat of the pubs in my constituency, the City of Chester, not least because of the Mersey barrage. Indeed, there is great interest in it there. Of course, the final decision on whether the scheme should go ahead will be taken on commercial grounds, as well as environmental grounds, to which the hon. Gentleman has referred, and which, I agree, are very important indeed.

Mr. Stern: Will my right hon. Friend do his best to bring the report forward as soon as possible? While this matter may not be the talk of the pubs in Newham, I can assure him that it is the talk of the pubs around the docks in Bristol, not least because it is hoped that the new opportunities that will be created in Avonmouth by the abolition of the national dock labour scheme will not be stopped by a barrage just outside the port.

Mr. Morrison: As my hon. Friend knows, the speed of a convoy is the speed of its slowest ship. I can assure him that in this matter, I will not be the slowest ship. We shall make sure that as soon as the report reaches us it is put expeditiously in the right places so that everybody can see it.

Acid Rain

Mr. Archer: To ask the Secretary of State for Energy if he will make a statement on the programme to combat the polluting emissions which cause acid rain.

Mr. Michael Spicer: The CEGB announced in February the award of the contract for retrofitting flue gas desulphurisation equipment to Drax power station. The board is currently considering which station should be retrofitted next.

Mr. Archer: Has the Minister grasped that it is not only the international relations of this country that are threatened by acid rain, but every industry and every activity that depends upon pure water, and that those waters that have not yet acidified are depending on their buffering effect, which is by definition a diminishing asset? Does he have no sense of urgency about this?

Mr. Spicer: We have a very great sense of urgency. That is why we will comply, and will make sure that our industry complies with the regulations under which there must be a 60 per cent. reduction in SO2, emissions by the year 2003.

Mr. John Evans: Is the Minister aware that there is growing concern in the Warrington and St. Helens area that the CEGB is backtracking on the proposal to install a gas scrubber in the Fiddlers Ferry power station? Will he give an undertaking that, notwithstanding privatisation,

the CEGB, or the privatised company, will go ahead with that scrubber, which is essential if acid rain in the Warrington and St. Helens area is to be reduced?

Mr. Spicer: I cannot say that Fiddlers Ferry will get the next scrubber, because that will be the responsibility of the successor company, PowerGen. However, I can give the hon. Gentleman an assurance— the assurance that I have just given the right hon. and learned Member for Warley, West (Mr. Archer)— that the regulation requiring a 60 per cent. cut in SO2emissions by the year 2003 will be complied with by the industry. Which existing power stations it decides to retrofit will be a matter for the industry. However, I repeat that the 60 per cent. reduction regulation will have to be complied with.

British Coal

Mr. Allen: To ask the Secretary of State for Energy how many miners there were in 1979; how many there are at present; and what information he has of British Coal's estimate of long-term trends in future numbers working in the industry.

Mr. Michael Spicer: At the end of British Coal's 1988–89 financial year there were 81,739 men on colliery books compared with 233,163 at the end of 1979–80. Numbers for future years will depend on the performance of individual collieries and the success of British Coal in meeting the requirements of its customers.

Mr. Allen: Is the Minister aware that those numbers will decline even further unless the Government take action to prevent major imports of coal? Will he look at the possibility of subsidising exported coal to the same extent as nations such as Russia, South Africa, many South American countries, Poland and Australia, subsidise their exports to this country? Will he introduce some balance into subsidy?

Mr. Spicer: First, I must draw the hon. Gentleman's attention to the fact that those reductions in manpower from 233,000 to 81,000, which are considerable, have been accompanied by an almost static production rate, which shows a tremendous, fantastic increase in productivity. Secondly, I remind him of the Government's policy to ensure that that improved performance will continue in future. That continuation will be sufficient to beat off imports. We shall not introduce either increased subsidies on the present levels, which are considerable— we have spent £9 billion of taxpayers' money in recent years, and the hon. Gentleman should remember that when he talks about coal subsidies— or import controls, because that would not be in the best interest of consumers, particularly of electricity.

Oral Answers to Questions — ATTORNEY-GENERAL

Magistrates (Appointment)

Mr. Allen: To ask the Attorney-General how many local advisory committees on the appointment of magistrates (a) have and (b) have not made their membership publicly known; and what further steps he is taking to encourage an end to secrecy in the appointment of magistrates.

The Solicitor-General (Sir Nicholas Lyell): About half the 95 advisory committees had made the identity of their members public by the end of 1988. All committees are required to do so by the end of 1992. The Lord Chancellor and the Chancellor of the Duchy of Lancaster are encouraging committees to make the identity of their members public immediately.

Mr. Allen: Is the Solicitor-General concerned about the secrecy involved in these local advisory committees? Will he encourage the committees that have not yet responded, so that the local community is properly reflected by sex, ethnic origin and class? Will he also ensure that he finds out how many freemasons are on the committees, so that they, too, have a fair share of local magistrates?

The Solicitor-General: As I have said, the Lord Chancellor is encouraging the local advisory committees to publish their composition without delay. He is anxious that they should be broadly based and reflect the nature of the local community, as should the broad base of the magistracy itself.

Mr. Harry Greenway: Can my hon. and learned Friend give the age of the youngest magistrate? Could more and younger magistrates be appointed? That would have the obvious advantages that they would serve for a long time and gain in experience, as well as being useful on appointment.

The Solicitor-General: I cannot tell my hon. Friend the exact age of the youngest magistrate, but certainly the Lord Chancellor seeks to procure magistrates from a wide age range, including younger ones, who are more difficult to get because they tend to be more involved in their work. He will certainly take note of my hon. Friend's suggestion.

Legal Profession (Green Papers)

Mr. Archer: To ask the Attorney-General what responses the Lord Chancellor has received to his Green Papers on the future of the legal profession.

The Attorney-General (Sir Patrick Mayhew): At 31 March a total of 702 such responses had been received.

Mr. Archer: While thanking the Attorney-General for that informative reply, may I ask whether he has now grasped that the Green Papers have succeeded in uniting opposition from a diverse spectrum of opinion? Is he aware that some of us are troubled not because the proposals are too radical, but because it has not become apparent how Manchester school of economics principles will achieve the stated objective of making effective legal services avalable to the wider public?.

The Attorney-General: The right hon. and learned Gentleman will have observed, perhaps, that in another place on Friday, my noble Friend the Lord Chancellor said that it was part of the purpose of the Green Papers to stimulate debate and that they had certainly succeeded in that objective. The purpose of the Government's provisonal proposals is to ensure that the public are provided with the most efficient and effective network of legal services at the most economical price.

Mr. Favell: No one should be granted immunity from change— not doctors, not nurses, not dockers and not lawyers.
On the constitutional issue raised by the Lord Chief Justice, will my right hon. and learned Friend assure the House that the Government will do all that is necessary to ensure the long-term future independence of judges, never forgetting that the Left would dearly like to bring the judiciary within the long arm of the state?

The Attorney-General: The legal profession is certainly not one which expects, requires or seeks to be immune from change.
As to the constitutional requirement of the independence of the judiciary in this country, I can give, on behalf of the Government and of the Lord Chancellor, the most categorical assurance that they hold firmly to that principle, which is absolutely central to the rule of law.

Mr. Winnick: Will the Attorney-General ensure that, whatever may be the final outcome regarding the future of legal services in this country, there will be adequate provision for the confidentiality of letters written by Law Officers about matters related to Cabinet affairs? Does not the right hon. and learned Gentleman consider that he was the fall guy in the Westland affair? Does he not feel deeply resentful and angry at the way in which he was used by No. 10?

Mr. Speaker: That has nothing to do with the main question.

The Attorney-General: Far be it from me, Mr. Speaker, to quarrel at this early state of the afternoon with your opinion.

Mr. Ashby: Will my right hon. and learned Friend accept from me that the Green Papers have stimulated necessary debate and that we should be looking for changes in the legal profession only where those are necessary? In the course of seeking advice on the Green Papers, will my right hon. and learned Friend also institute inquiries into the way in which estate agents up and down the country are insisting that people go to them for legal services and for mortgages as well as for the purchase of houses? Will he consider the effect of that policy on small town solicitors throughout the country who are the backbone of legal advice?

The Attorney-General: I am grateful for what my hon. Friend said at the beginning of his question with which, of course, I fully agree. It is the key to the Government's provisional proposals that they should stimulate competition, because the Government's belief in competition being very much in the interests of the ordinary citizen, in whatever area with which we are concerned, lies behind these provisional proposals. I believe that what my hon. Friend has said would form the basis of a very proper submission to the Lord Chancellor in response to the Green Papers.

Mr. Mullin: Given some of the people who have come out against the Lord Chancellor's proposals, does the Attorney-General agree that the proposals cannot be all bad?

The Attorney-General: I would welcome the opportunity— although I am surprised that one should be thought necessary— of saying that my opinion is that these proposals are not "all bad".

Mr. Stanbrook: Will my right hon. and learned Friend ensure that there is adequate consultation with the


members of the Bar whose future careers are involved in this matter, and not give undue credence to the aged opponents of reform in the other place, who are no more representative of the Bar than the other place is of the general public?

The Attorney-General: My hon. Friend asks that the Lord Chancellor in particular, and the Government in general, shall not give undue credence to any particular expression of opinion. It would not be the purpose of my noble Friend the Lord Chancellor to be undue in any response to what is put to him.
What is required in response to the Green Papers is, as my noble Friend has so often made clear, the fullest and the most frank and uninhibited discussion possible. At the end of the period that has been set aside for consideration of the proposals the Government will consider what the next step forward should be.

Mr. Tony Banks: Is the Attorney-General aware that at the performance of The Plantagenets at the Barbican the line from Henry VI, Part 2
let's kill all the lawyers
gets the largest cheer from the audience? Is the right hon. and learned Gentleman aware just how unpopular lawyers are— perhaps even more unpopular than Members of Parliament? Therefore, will he ensure that they are brought to heel and that when we have a vote in this House it will be a free one?

The Attorney-General: I have just come back from a visit to the People's Republic of China where quite a large number of lawyers were killed not long ago. That country is now trying to recruit about half a million lawyers.

Land Registry

Mr. Colin Shepherd: To ask the Attorney-General what is the present number of staff employed by the Land Registry.

The Solicitor-General: At 1 March 1989 the Land Registry employed 11,476 staff.

Mr. Shepherd: Is my hon. and learned Friend aware that, despite an increase in staff, the Land Registry has admitted that there is no prospect of an immediate reduction in the unacceptable delay in handling transactions? Is my hon. and learned Friend satisfied that the current policy of compulsory registration by 1990 is sustainable? Should the time scale be extended, the backlog cleared and then calls for voluntary registration, where appropriate, made?

The Solicitor-General: My hon. Friend may know that, last year, the complement of staff was increased by more than 2,100 and as a result the Land Registry's throughput has increased considerably. Last year, some 6·4 million pre-completion, pre-contract transactions were dealt with — 90 per cent. within four days and the remaining 10 per cent. within six to seven days. The problem arises with the post-completion, substantive applications where there has been an average delay of four months. With the increase in staff, those applications are now being worked off quite fast at the rate of about 112,000 since the beginning of this year, over and above the speed at which those applications are coming in. It is reckoned that the Land Registry is on course to achieve a satisfactory standard by March next year.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Yemen

Mr. Adley: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the aid programmes to the Yemen Arab Republic and to the People's Democratic Republic of Yemen.

The Minister for Overseas Development (Mr. Chris Patten): Our aid to the Yemen Arab Republic came to about £6·9 million in the financial year just ended. The programme comprises assistance for technical co-operation projects, notably in natural resources, and English language teaching, together with training. Assistance has also been provided under the aid and trade provision. In the case of the People's Democratic Republic of Yemen, our aid came to just under £1 million last year, including emergency relief, colonial pension payments and a small technical co-operation programme concentrating on training and English language teaching.

Mr. Adley: I thank my hon. Friend for that reply. Does my hon. Friend accept that in north Yemen, due to the lack of longstanding links between that country and our own, our aid programme is substantially less than that of most of our European Community partners and that in south Yemen, the needs are great, but, due to the unhappy ending of our previous relations in 1967, our assistance is extremely small? In the light of the Foreign Secretary's recent visit will my hon. Friend consider reassessing our relationship in terms of aid with those countries?

Mr. Patten: We looked at our aid programme in the Yemen Arab Republic and in its next door neighbour before my right hon. and learned Friend's visit and that is one reason why, during that visit, he announced an increase of about £500,000 in the technical assistance programmes to the YAR.
The development of our aid partnership with the People's Republic of Yemen has been held back not only by political factors, but by the lack of a memorandum of understanding on technical co-operation. That has posed administrative problems, but there is a draft memorandum with that country's Government and I hope that they will return it to us as soon as possible.

Dr. Marek: Does the Minister agree that now is a good time to improve relations with the People's Democratic Republic of Yemen? If he does, will he give careful consideration to making a generous donation to the PDRY to alleviate the floods and destruction that have just occurred there?

Mr. Patten: Following the recent floods we have been able to give help of £ 190,000 to the PDRY for the purchase of two Land Rovers, shelter materials and water purification tablets. I repeat what I said to my hon. Friend the Member for Christchurch (Mr. Adley); it would help us to develop our technical assistance programme with the PDRY if it would agree a memorandum of understanding with us.

Disasters

Mr. Moss: To ask the Secretary of State for Foreign and Commonwealth Affairs if, following the Armenian earthquake, he has reviewed Britain's capacity to respond to disasters overseas.

Mr. Chris Patten: I have now carried out such a review and introduced a number of improvements in our operations. These include more staff and disaster management training in the Overseas Development Administration and better co-ordination with other Departments and voluntary agencies in this country involved in disaster relief.
At the international level I have put proposals to the United Nations disaster relief office for improving the co-ordination of the response to disasters.

Mr. Moss: While recognising that this country and many others responded extremely generously, should not the international community do more to prepare in a better way for such disasters, so that it can respond in a more professional and organised manner?

Mr. Patten: I agree with what my hon. Friend said. It is important that, at the outset of the United Nations natural disaster reduction decade, we should put forward initiatives for better co-ordinating our assistance. We have proposed to the United Nations that the disaster relief office should hold an international register of pledges of specific assistance that could be cashed whenever a disaster occurred. I have also told the UNDRO that we are prepared to host a ministerial conference to take forward those ideas. I hope that that will be possible in the next few months.

Mr. Hanley: Is it not true that the British Government and people are extremely generous with emergency aid? Is it not also true that we are greatly respected throughout the world for our quick and positive response to such circumstances?

Mr. Patten: The propositions of my hon. Friend are true. I particularly commend our experienced international charities such as the Red Cross and Oxfam. We have lessons to learn from those charities and— without requiring an excess of Christian humility on their part— they occasionally have lessons to learn from us.

Ghana

Mr. Greg Knight: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British aid to Ghana.

Mr. Chris Patten: The United Kingdom continues to be a major supporter of Ghana's economic recovery programme, for which we announced on 1 March a pledge of a further £20 million of balance of payments finance. This brings the total of our balance of payments support to Ghana since 1983 to £92·5 million.

Mr. Knight: Does my hon. Friend agree that those figures show that the Government's record of aid to Ghana is excellent? However, does not the success in Ghana show that African countries that follow a sensible reform programme—for example, that suggested by the World Bank or the United Nations— do better than those which do not?

Mr. Patten: Yes. The World Bank and the United Nations development programme have just issued an encouraging report underlining the point made by my hon. Friend. I hope that other countries will draw confidence and inspiration from what Ghana has achieved in the past few years. I hope that they will also follow Ghana in attempting to design good social programmes to accompany the economic reform programmes.

Mr. Boateng: Given the outstanding success of the British Council library and reading rooms in Ghana, will the Minister consider extending aid and assistance to the British Council so that it can open similar libraries and reading rooms in southern Africa, particularly in Namibia, where they are much needed in the run-up to independence?.

Mr. Patten: I endorse what the hon. Gentleman said about the important role played by the British Council. I am delighted that the amount that it can do in developing countries will have increased during this year. It has an important job to do in countries in the front line in southern Africa, as the hon. Gentleman said, and I am sure that we particularly need to go on training, teaching the English language and providing as much assistance as possible in Namibia as it moves towards independence.

World Bank

Mr. Barron: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will consider publishing the United Kingdom's voting record at the World Bank.

Mr. Chris Patten: I have considered this question, but have decided for the moment to make no change in the longstanding practice of successive Governments.

Mr. Barron: Will the Minister reconsider that answer in view of the fact that the United States of America not only discloses its voting record in the World Bank but encourages other countries to do so? It seems to me and many others essential that people who ask for help from the World Bank should know what decisions are being taken, because that will help them to put their case.

Mr. Patten: I note what the hon. Gentleman says about the advocacy of the United States in the World Bank. It has not been as successful there as elsewhere, as we do exactly the same as everyone else in the organisation, with the exception of the United States.
It is important to remember that votes in the World Bank board are extremely rare. Our main interest is that the World Bank should be as effective as possible, but, as a matter of course, we consult widely on controversial matters that come before the board— for example, with interested environmental groups.

Mr. Jack: What are the Government doing to encourage the World Bank to develop more environmentally sensitive approaches in its investment policy, particularly on the rain forests?

Mr. Patten: We are doing a good deal to encourage the World Bank and other multilateral organisations to do more environmentally. The World Bank has learnt a good number of lessons in the past few years. We also intend to do more through our bilateral programme in this extremely important area.

Miss Lestor: Will the Minister reconsider his answer about the World Bank, bearing in mind that the Canadian Government have expressed concern that matters should not be shrouded in secrecy and that more information should be available? The United States Treasury Secretary, Mr. Brady, has written to the president of the World Bank about the same issue. Remembering that things that are kept secret by the Government tend to be leaked at the end of the day, is it not important that taxpayers should know how we behave on these important matters in the World Bank, and should not the information be made available?

Mr. Patten: To be honest, the best way of keeping a secret is to make a speech or deliver an answer in the House. It is conceivable that that will continue to be so for this answer, too.
We should not get this out of perspective. It seems to me that, as the recent controversy over the power sector loan for Brazil has shown, when matters of controversy arise there is a good and open debate about them. The members of the Overseas Development Administration who are at present answering the thousands of letters about the proposed loan to Brazil, which I think is unlikely to go forward in the shape originally suggested, would not think that matters had been shrouded in secrecy.

Points of Order

Mr. Tam Dalyell: On a point of order, Mr. Speaker. Have you had any request from Ministers about a statement on the entirely new doctrine that it has apparently now become all right for a principal private secretary to the Prime Minister to authorise the leaking of a Law Officer's letter to Mr. Chris Moncrieff?
Have you had any request for an explanation of whether Lord Armstrong of Ilminster knew that there had been explicit approval of a disclosure of a Law Officer's letter when he put forward a report that concentrated on differences of understanding between civil servants? Might he not have been just a little economical with the truth?
My point of order is this: in the style of Mr. Justice McCowan, is it now the case that a principal private secretary to the Prime Minister should carry out the instructions of politicians, even though he knows that those instructions are against the highest traditions of the British Civil Service?
Finally, when did Mr. Ingham and Mr. Powell tell their Prime Minister what they had done and what they had approved?

Mr. Speaker: The short answer to the hon. Gentleman is that I have had no such request. These are matters for political debate and not for points of order to me.

Mr. David Winnick: I have a point of order which is directly for you, Mr. Speaker, and it is one which I consider to be of such importance. I do not think that an hon. Member who has been here for a quarter of a century or more is suspended simply for the joy of it. My hon. Friend the Member for Linlithgow (Mr. Dalyell) was suspended; it is true that there was a vote on it. I want to ask you a question, Mr. Speaker, because there is no one else I can ask. If later events prove that an hon. Member who has been suspended was telling the truth— and everything indicates that my hon. Friend has been telling the truth about Westland— what can be done about the suspension?

Mr. Speaker: I can deal with that question quite simply. The hon. Member was not suspended for what he said but because he would not withdraw an unparliamentary word.

Mr. Max Madden: On a point of order, Mr. Speaker. I apologise for not giving you notice of my point of order, but I expect that the article by Adam Raphael in yesterday's edition of The Observer has been brought to your attention because it makes serious allegations about the workings of the House. In the article, a Mr. Charles Miller, of Public Policy Consultants, is quoted as saying that some Select Committee Chairmen had been bought. He says:
I have found a large number of venal members of Parliament.
The article makes a number of serious allegations, including allegations that some research assistants employed by Members are full-time members of companies that are professional lobbyists of the House. The article is headlined:
A £10m trade in influence".
It makes serious allegations that I ask you to consider. As there is a range of matters affecting a number of Committees, I should be most grateful if you would consider this matter with a view to requesting the appropriate Committees to interview Mr. Miller and to

consider other steps that could be taken to clean up what is being rapidly seen as a corrupt, or potentially corrupt, House of Commons?

Mr. Speaker: Of course I saw that article. I understand that the Select Committee is already investigating this matter and has taken evidence. If the hon. Gentleman has a further point to put about Mr. Miller's allegation, he should direct it to the Select Committee.

Mr. Alan Williams: On a point of order, Mr. Speaker. On Tuesday you gave a ruling which no one in the House challenged. It was about the application of the sub judice rule in connection with published sections of the report on Harrods, Al Fayed and Lonrho. We did not challenge your ruling because the Secretary of State for Trade and Industry— [Interruption.]
We are trying to be serious about an important national matter. We did not challenge your ruling, Mr. Speaker, because we had the assurance from the Secretary of State for Trade and Industry that any such quotations could have prejudiced the fairness of any subsequent trial and because the serious fraud office had said that further disclosure could prejudice its further inquiries.
On the front page of today's Financial Times there is a fascinating article by a Mr. Clive Wolman. The article is based on extensive information, including quotations about activities by members of the serious fraud office and officials. We have had the much publicised comment by the Secretary of State for Trade and Industry about wrongdoing. That comment may have been a political gaffe and a blunder, but we are not making much of that because such things occasionally happen. However, when it is taken in conjunction with what is clearly leaked information that could have come only from the Department of Trade and Industry or from the serious fraud office, it reveals information that would prejudice any future trial.
May I ask you, Mr. Speaker, to look at the contents of the article and let us know, perhaps tomorrow, whether, in view of what is clearly official leaking from one or other o those two bodies, the ruling that you gave last week should be reconsidered?

Mr. Speaker: I will have a look at the article. It would be difficult for me to read all the newspapers every day. do my best at the weekend. The sub judice rule is well known. I have nothing to add to what I said about it last week.

Mr. Jeff Rooker: On a point of order, Mr. Speaker. When you consider the point made by my right hon. Friend the Member for Swansea, West (Mr. Williams), will you consider this point as well? I do not expect you to respond immediately to it. It flows directly from your ruling last Tuesday, which I do not challenge— and I genuinely mean that.
For questions to the Attorney-General on 12 December and 23 January the Table Office allowed me to table specific questions— which were answered— about the report of the Department of Trade and Industry on the House of Fraser and Lonrho. For questions to the Attorney-General on 13 February, by which time the issue had gone to the other place, I was prevented from asking such questions, and so resorted to questions about the serious fraud office.
The issue before the other place is whether the Secretary of State misdirected himself. Win or lose in the other place, it is up to the Secretary of State to decide whether to refer the matter to the Monopolies and Mergers Commission. He cannot be ordered to do so. Therefore, the sub judice rule is being extended. When the other place has made its decision, it does not matter what the Secretary of State decides to do; he cannot be wrong. The law gives him total discretion as to the reference.
When the other place has so decided, will I and other hon. Members be free, as I was in both December and January, to table specific questions about this matter, to be answered at the Dispatch Box? There are no other changed grounds— no proceedings, no prosecutions, no charges. It is simply an internal working document of government for which no legal actions will be pending. I hope that you will consider this point, Mr. Speaker.

Mr. Speaker: Of course I will look into the matter. When the hon. Gentleman tabled his questions before, the matter was not before a court, and in such circumstances hon. Members could table questions. My sub judice ruling last week was well understood by hon. Members. I said that it was not in order to quote from the document. The House will know that, with that proviso, I granted a private notice question on the matter.

Mr. Dennis Skinner: On a point of order, Mr. Speaker. I have been listening carefully to the points of order that have been raised this afternoon. I do not know whether you videoed the programme last Friday. It was a bit boring in parts, I have to agree, but it made an essential statement that needs to be looked at.
My hon. Friend the Member for Linlithgow (Mr. Dalyell) asked when you would be able to assist him in getting a statement or a debate about the renewed arguments about Westland, and you had to say, "It's nowt to do with me." You were than asked about the takeover of Harrods, which is also in the public eye, and you had to say, "Sorry, I can't help." My hon. Friend the Member for Bradford, West (Mr. Madden) asked about an article in The Observer, which claimed that Members of Parliament who table questions on behalf of somebody can get £200 a time, and you had to say, "Sorry, it's none of my business."
This afternoon, we shall be debating the Electricity Bill, and not one Opposition Member wants that Bill. I doubt whether more than 20 per cent. of our people want the electricity industry to be privatised. If we had a proper system in this cock-eyed place, we would be debating those three important issues and not the Electricity Bill.

Mr. Speaker: The hon. Gentleman draws attention to an interesting point. Too frequently, points of order are matters of political controversy across the Chamber, as they have been today. I fully understand that, over many years, it has become a practice for the Opposition to put questions such as these through the Chair, but the House knows that they are not really matters for me. I do not think that it would be wise for the Speaker of the House to be given the responsibility of deciding also what business we should debate every day.

Several Hon. Members: rose——

Mr. Speaker: Mr. Campbell-Savours.

Mr. Martin Flannery: I was rising in my place long before anyone else.

Mr. Speaker: The procedure does not work like that.

Mr. Campbell-Savours: May I ask you, Mr. Speaker, to be most diligent——

Mr. Flannery: Disgraceful.

Mr. Speaker: Order. I have the difficult task of deciding who catches my eye first, and it was the hon. Member for Workington (Mr. Campbell-Savours).

Mr. Campbell-Savours: I ask you to be most diligent, Mr. Speaker, when dealing with the article, and especially the statement which clearly emanates from the serious fraud office. Will you examine the article on the basis that I intend to table a long series of motions that will bring into the public domain hitherto unpublished material that sets out what happened in Lonrho and what appeared in the Lonrho broadsheet over the past few months during which Mr. Tiny Rowland has been pursuing the Al Fayeds.

Mr. Speaker: First, the hon. Gentleman must submit his motions, and then we shall see what happens.

Several Hon. Members: rose——

Mr. Speaker: Order. I shall now hear the hon. Member for Sheffield, Hillsborough (Mr. Flannery).

Mr. Flannery: Thank you, Mr. Speaker. It is about time.

Mr. Speaker: That is unworthy of the hon. Gentleman. It would be courteous if he were to rephrase that comment.

Mr. Flannery: May I rephrase it by saying thank you, Mr. Speaker?
Further to the point of order raised by my hon. Friend the Member for Bradford, West (Mr. Madden). I note that the Leader of the House is in his place. The article which appeared in yesterday's edition of The Observer which was written by Mr. Adam Raphael reveals a state of affairs that should concern every hon. Member.
You know as well as I do, Mr. Speaker, that the majority of the lucrative consultancies within the House are held by Conservative Members. Most of the consultancies that are held by Labour Members relate to trade unions. Any other consultants on the Labour Benches should be ashamed of themselves. The article to which I have referred reveals that extremely important individuals on the Government Benches have masses of directorships and consultancies, and that some of them are in charge of Committees. The hon. Member for Shipley (Sir M. Fox) said that he was taking up these activities for the later part of his life, suggesting that the rest of us do not need to do it. In any event, we do not do it in that way.
Is it in order for me, Mr. Speaker, to ask the Leader of the House to say something about the serious issue which has been drawn to our attention, whether now or in the future? People throughout the country know now that there is something sick and wrong in this place. They know that vast sums are being made by some hon. Members, largely Conservative Members. The rest of us are being blamed for the things that they do. They are making millions of pounds out of their activities.

Mr. Speaker: I am sure that the Leader of the House has heard what the hon. Gentleman has said.

Several Hon. Members: rose—

Mr. Speaker: Order. We have a busy day ahead of us.

Mr. Eric S. Heffer: I wish to take up, Mr. Speaker, your reply to my hon. Friend the Member for Walsall, North (Mr Winnick), which concerned something said by my hon. Friend the Member for Linlithgow (Mr. Dalyell), who was recently thrown out of the House. My hon. Friend was thrown out because he said that someone was a liar. If I know that an hon. Member is lying and I wish to say that he is lying, does your action in having my hon. Friend thrown out mean that for all time none of us can ever say that an hon. Member is lying when we know that he is? How can we deal with such an issue?
I understand that it is custom and practice that we do not say certain things in this place. At times I have retreated, as it were, because I have been instructed to retreat. I did not think it right to retreat, but you, Mr. Speaker, told me to retreat, and so I retreated. I do not believe in getting thrown out of the House, and never have done. However, if I know that someone is a liar and he says something that I know is a lie, how can I relate that to the House? Apparently, I cannot table a motion that states that a Member of this place is a liar. How can I deal with it?

Mr. Speaker: Hon. Members know that self-discipline in the House requires that hon. Members do not impute dishonour to each other. Every occupant of the Chair is reluctant to use the weapon of naming a Member. Most hon. Members, when instructed by the Chair to withdraw an unparliamentary word, such as that which the hon. Member mentioned, do so, and I hope that that will always happen. If an hon. Member wishes to persist in making an allegation about another hon. Member, he must do so by an appropriately worded substantive motion.

Mr. Tony Banks: Further to the point of order, Mr. Speaker. It appears that the Government are trying to secure the receipt of all copies of The Observer special edition which was published last week. Incidentally, the print comes off the special edition just as it comes off the regular edition, but the factual content is interesting.
Will we be advised by you, Sir, to hand our copies to the Government? A number of us have received the special copies— indeed, I am doing a fairly good trade in lending mine to Conservative Members, including Front-Bench Members. Are we entitled to keep our special copies, or do we have to return them to the Government?

Mr. Speaker: That is not a matter for me. I have not seen the special edition either, so perhaps the hon. Member will lend me his copy.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the National Health Service (Functions of Health Boards) (Scotland) Order 1989 (S.I., 1989, No. 446) be referred to a Standing Committee on Statutory Instruments, &amp; c.— [Mr. Heathcoat-Amory]

Orders of the Day — LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) BILL (LORDS

Order for Second Reading read.

Motion made, and Question put forthwith, pursuant to Standing Order No. 90(6) ( Second Reading Committees), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — Electricity Bill

As amended (in the Standing Committee), further considered.

Clause 19

POWER TO REQUIRE SECURITY

Mr. Malcolm Bruce: I beg to move amendment No. 116, in page 16, line 22, leave out subsection (4) and insert—
'(4) For the purposes of subsection (1)(a) above, reasonable and sufficient security shall be deemed given

(a) (i) where the person giving security is prepared to take supply of electricity through a pre-payment meter; and
(ii) it is reasonably practical in all the circumstances (including in particular the risk of loss or damage) for the supplier to provide such a meter; or

(b) where a direct payment is made to the supplier under regulation 35 of the Social Security (Claims and Payments) Regulations 1987 (deductions from income support and other benefits and direct payments to thrid parties); or
(c) the person requiring the supply is repared to enter an agreement to pay the estimated costs by means of a weekly or monthly instalment plan, the payment to be adjusted on an annual basis to reflect actual consumption.

(5) In sub-section 1(a) above, "security" means any arrangement in consequence of which a public electricity supplier may be assured of payment of money due to him and shall include a deposit given to such supplier or guarantee or charge (whether legal or equitable) in favour of such supplier.
(6) Any dispute arising under sub-paragraphs (4) and (5) above between a public electricity supplier and a person giving or wishing to give security shall be determined by the Director as though it were a dispute falling to be determined under section 21 below.'.

Mr.Speaker: With this it will be convenient to take the following amendments: No. 115, in schedule 6, page 89, line 38, at end, insert—
'(2A) For the purposes of paragraph 2, (2) (a) above, a person shall be regarded as having made good the default—

(a) where the person giving security is prepared to take supply of electricity through a pre-payment meter—

(i) which is calibrated to recover over a reasonable period any money in respect of which he is in default; and
(ii) it is reasonably practical in all the circumstances (including in particular the risk of loss or damage) for the supplier to provide such a meter; or

(b) Where a direct payment is made to the supplier under regulation 35 of the Social security (Claims and Payments) Regulations 1987 (deductions from income support and other benefits and direct payments to third parties).

No. 152, in schedule 6, page 91, line 6, at end add—
'5A. If a tariff customer has not, after the expiry of 28 working days from the making of a demand in writing by a public electricity supplier for payment thereof, paid all money due from him in respect of the supply of electricity by the supplier to any premises at the provision by the supplier of any electric line or electric plant, the supplier may—

(a) apply to a court for an order granting permission to cut off the supply to the premises, or to any other premises occupied by the customer, by such means as he thinks fit;
(b) recover any expenses incurred in so doing from the customer and
(c) an application to court under this schedule shall be by way of summary procedure.'.

Mr. Bruce: Amendment No. 116 is designed to reduce the incidence of disconnection of electricity customers, and amendment No. 115 is designed to speed up and facilitate reconnection for those who have had the misfortune to be disconnected. Hon. Members who served on the Standing Committee will recollect our considerable debate on disconnections and the wider linked issue of fuel poverty. Somewhat to our surprise, and to the surprise of Conservative Back Benchers, we got an assurance from the Secretary of State that the Government intended to support a revised code of practice similar to that nearing completion of negotiation for the gas industry. The right hon. Gentleman accepted that it was absurd that the code of practice for disconnection in the electricity industry should be less advantageous to the consumer than that which applied in the gas industry.
When pressed, the Secretary of State amplified the position somewhat. I hope that the Minister can give us a little more detail. The Secretary of State finally said:
Because of the consultations that must take place, the final form may not be settled before the Bill leaves its Committee stage, but it will be settled well before the Bill leaves the Commons. There is a three-month cycle of consultations which may not end before the Committee stage. We expect the licence to be modified by Report stage."— [Official Report, Standing Committee E, 31 January 1989; c. 614.]
I raised this matter during Question Time and the Minister gave the impression that a final agreement was not yet to hand. I hope that he will accept that it is appropriate and legitimate at this point to press him for some clarification about the terms of the code of practice— to the extent that he is able to reveal them— about the timetable for when the code of practice will be agreed and about how and when it will be incorporated into the licence. It is not wholly satisfactory to be told that the code of practice may be available to us before the Bill finally leaves this House.
If the Bill is unamended in the other place, it will not come back to this House. However, when it goes to the other place, we shall seek to press this amendment. Whatever happens, it will be helpful if the Minister can give us some clarification.
I am sure that the Minister will accept that many people are interested in this matter and want to know what will happen. For the record, it may be worth pointing out that, as the Bill is drafted, there is a significant distinction between the gas code of practice and the electricity code of practice proposed under the draft licence. It is proposed that the electricity consumer should be given only 15 days' notice of disconnection, whereas the gas consumer receives 28 days' notice.
The issue of disconnection ebbs and flows and arguments about the figures in themselves are not especially constructive. The annual rate of disconnections is still about 80,000 which I hope all hon. Members will regard as far too many. There has been some dispute about whether the figure is coming down throughout the country. Some of the figures suggest that the disconnection rate is going up in at least one or two areas, which is a matter for concern. We cannot be absolutely sure that, even to the extent that figures suggest that disconnections are decreasing, it is entirely to do with modified practices as opposed to the good fortune of having had a mild winter, which inevitably reduces the likelihood of disconnection.
It is all very well for the Government to say that the trend is downward and that there is no need to worry


because they will ensure that that trend will continue after privatisation. The experience with the privatisation of British Gas was the reverse: as soon as privatisation came into effect, the number of disconnections increased. That is why a new code of practice for disconnections is being introduced for gas consumers. I am sure that the Minister does not want a repeat of that in the privatisation of electricity because it would be politically embarrassing for him and, of course, far worse for those who suffer disconnection.

Mr. Eric S. Heffer: Will the hon. Gentleman take note of the fact that there are just two hon. Members on the Government Benches? We are discussing disconnections and people who will suffer considerably as a result. Yet Conservative Members are so interested in the matter that they will simply come in to vote against the amendment. The general public should take note of that.

Mr. Bruce: I am grateful for the hon. Gentleman's intervention. Whey I saw the number of Members on the Conservative Benches I thought that I had come lucky in an unexpected raffle for an extra Adjournment debate.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): Will the hon. Gentleman confirm that only three Back-Bench Labour Members are present? The hon. Member for Liverpool, Walton (Mr Heller) should not cast stones when he is sitting in a glasshouse himself.

Mr. Bruce: I think that I had better let that pass. I shall say simply that it would be helpful for the debate if more hon. Members were present. We are debating a serious and important issue which affects many people and causes them considerable concern.
We must avoid a situation in which new companies come into effect under the licensing procedures proposed in the Bill, but are not required to adopt a process of disconnection that automatically gives a better deal to the consumer than exists or has existed hitherto. The amendments seek to include specific measures in the Bill to ensure that whoever receives a licence is required to operate a code of practice that will minimise the incidence of disconnection.
4 pm
In that context the obvious factor to be considered is the extent to which lower income groups and poorer people are disadvantaged because they spend proportionately more of their income on electricity. Low-income pensioner households spend, on average, 30 per cent. more on electricity than average-income pensioner households. That makes electricity like an old-fashioned Giffen good. The 19th century example is the potato. As the price of potatoes went up, people bought more, because the potato was their staple diet. They had to ensure that they had an adequate supply, and it was other things such as bread and the luxury of meat that went by the board.
The same applies to electricity. People on low incomes facing increased electricity costs are forced to cut back on other commodities. They sometimes economise on heating, ca using great danger to their health and safety, and, regrettably, many of them die of hypothermia as a direct result. Some economise on food, which also

undermines their health, or on other near-essential commodities which are nevertheless not quite as necessary as heat and light.

Mr. Alex Salmond: Does the hon. Gentleman agree that his arguments are particularly relevant to the north-east of Scotland— the area that he and I represent— where charges for heating are about 30 per cent. higher than they are in the south-east of England?

Mr. Bruce: The hon. Gentleman has anticipated a point that I proposed to raise. He is absolutely right that, in areas such as the north of Scotland where winter temperatures are generally lower, although we have been luckier than usual this winter, people have to spend even more on heating than people in the milder south.
The problem is further aggravated by a number of measures introduced by the Government that squeeze people on low incomes. A direct consequence of the switch from the community programme to employment training has been a significant reduction in the number of home insulation schemes carried out by organisations under the neighbourhood energy action umbrella. SCARF—Save Cost and Reduce Fuel— an organisation in Aberdeen, which covers part of my constituency, is concerned about its ability to maintain a programme that is of benefit to people on low incomes and helps them to be warmer at lower cost. The reduction in such provision increases the burden.
The second factor that has to be taken into account is the introduction of the poll tax or community charge in Scotland this year. The poll tax falls proportionately more heavily on low-income families and will reduce their ability to pay for other essential services such as electricity. People on low incomes tend to depend more on electricity for their heating. Their houses tend to be less well insulated and they tend to be unable to take appropriate action to deal with the problem.
It is interesting, too, that the Government are about to launch a promotion campaign because of the relatively low take-up of family credit, which was designed to help low-income families. Many people have not taken up their entitlement, perhaps because of a lack of information and perhaps because of a reasonable feeling that if a household has wages coming in— particularly if there are two wage earners— it ought to be able to meet the essential bills. People do not like the idea of having to seek additional support and feel that wages ought to be paid at an economic level rather than being subsidised by the taxpayer. The very title "family credit" gives the impression that repayment is required, and that may deter people from taking up the benefit. Perhaps they are unable to service their existing debts and wisely do not wish to go further into debt. All those measures have increased the squeeze on low-income families at a time when they face rising costs.
An additional factor, touched on by the hon. Member for Banff and Buchan (Mr. Salmond), is that in certain parts of the country heating costs are higher. Yet the heating allowances scheme has been abolished in favour of the much less generous incorporation into the normal benefit process and a severe weather payment which has not been invoked since its introduction because we have had a mild winter. No one has benefited from those arrangements.
The situation is serious. We must introduce measures that give people a fairer deal in relation to disconnection. The Government say, "We resent the implication that we are responsible for inflicting disconnections." Yet in a variety of ways the Government's policies are hitting low-income groups and making it harder for them to pay electricity bills. That makes it more likely that they will get into difficulty and, under the existing code of practice, increases the likelihood that they will be disconnected. We must make a stand and prevent that happening.
The final factor to be taken into account is that privatisation will result in higher electricity prices for the whole population, and especially for those on low incomes. Even the Government acknowledge that that will happen in the short run, and many of us believe that it will happen in the long run as well. Electricity prices have already been increased unnecessarily and unjustifiably. Again, the situation is worse in Scotland than in England and Wales. In Scotland, the increase in electricity prices has been higher than the average rate of inflation, with no justification, other than that the companies— now the boards— are preparing for the privatisation requirement. That will force up electricity prices in Scotland— from the lowest in the United Kingdom to the highest in the United Kingdom. Such burdens on lower income families will mean an increase in the risk of disconnection and the hardship associated with it.
The amendments represent essential improvements to the Bill to ensure a specific agreed workable means of preventing disconnection wherever possible. I have not suggested a more radical measure, such as that in operation in Wisconsin, where all electricity supplies are reconnected on 1 October regardless of the customer's outstanding debt because of the importance of giving people heat and light throughout the winter. There should be no disconnections during the winter. I have refrained from making such a suggestion because I felt that the Government might be inclined to resist it. Instead, I have tabled practical and reasonable amendments which propose a code of practice within the law to prevent disconnections.
Obviously, the best solution is the use of prepayment meters. They enable people to pay as they go and remove the uncertainty of credit. People can see how fast they are using electricity. Meters can be adjusted by agreement to take account of any previous debt. For many, meters represent the best way to pay, particularly now that new meters have been introduced to reduce the risk of people breaking in, forcing the mechanism and running away with the money—or, in the case referred to last week, the washers— that they may find in the meter. If a person is prepared to take a prepayment meter, and if it is reasonable to provide such a meter, if direct payment has been agreed— from the social security office or by standing Order—or if a person has agreed to pay a deposit, there should be no question of disconnection. If someone disconnected under the existing arrangements agrees to the proposals, he should automatically be reconnected immediately.
Our objective is to prevent disconnections, and that is why amendment No. 116 is so important. The argument is overwhelming. The increase in fuel poverty that the Government are imposing on people on low incomes is

intensifying and, as drafted, the Bill would increase the possibility of hardship. The amendment is reasonable, practical and workable, and I hope that the Minister will accept it.

Mr. Kevin Barron: First, I should like to comment briefly on the absence of Conservative Members. The hon. Member for Gordon (Mr. Bruce) will remember our debate in Committee on fuel poverty. From the beginning of the sitting at 10.30 am until 7 pm every Tory Back Bencher who spoke defended the code of practice, only to be wiped off the floor when the Secretary of State spoke later. Perhaps Tory Members are not too keen on having a re-run of that in this debate.
The amendments pursue a number of the issues that we raised in Committee and seek to ease the burden of fuel debt for badly off consumers and to ensure that no one's fuel supply is disconnected because he or she is unable to meet the fuel bill.
People are fuel-poor for several reasons. Obviously, income plays a major part. People on low incomes have great difficulty in providing themselves and their families with enough heat to keep warm and enough power for adequate lighting and hot water. Unfortunately, those whose bills are the largest and the most difficult to meet tend to live in homes with no insulation, damp proofing, double glazing or central heating. In the long term, it will be only through a policy of bringing all homes up to insulation standards, as well as ensuring that everyone has an adequate income, that we will make inroads into solving the problems of fuel poverty.
It is important to stress that now, because, as a result of changes in employment regulations, the different funding of projects through the Manpower Services Commission and the changes made to employment training, unfortunately many schemes that had been useful in helping people who live in poorly insulated homes to fight fuel poverty have had to be stopped in the past six months.
However, at least at the moment we can ensure that people do not have to live without heat or power. Living like that is a miserable experience which causes great stress to individuals and families, as well as depriving them of warmth and light. I am sure that in this day and age and in this country, which is energy-rich in coal, oil and gas, there should be no need for people to suffer fuel poverty.
We are anxious to avoid the massive increases in disconnections that followed the privatisation of the gas industry. As the House knows, since that privatisation disconnections have risen by 30,000 per year.
In Committee, we were pleased that the Secretary of State finally agreed with us that the present voluntary code of practice, which had been defended by many of his hon. Friends, has not proved adequate and has not protected consumers who need protection. The Secretary of State told the Committee:
there are good grounds for moving to the system that Mr. McKinnon
— the director of Ofgas—
is recommending for gas …we shall add a similar clause to the licence. It will be a better arrangement."— [Official Report, Standing Committee E, 31 January 1989; c. 607–8.]
It was on that basis that we withdrew all our amendments on fuel poverty to this section of schedule 6. The Secretary of State gave the Committee an assurance that the House would see the proposed clause. He said that he hoped that that could happen before reaching this stage of our proceedings on the Bill but, unfortunately, he has


notified us that that cannot happen because Mr. McKinnon is revising his proposals in the light of the consultations that he has held since the original publication of the modification for the licence.
4.15 pm
The major weakness of the original proposals— I assume that the Secretary of State as well as Mr. McKinnon is considering this—was that the additional protection would be available only to those who made contact with British Gas. Advice agencies have expressed their worry that those who do not make contact— out of fear, because they are unaware of the need to do so, because of language or literacy problems or because they have no experience of dealing with bills— will fall into even greater debt and suffer disconnection. All hon. Members who have ever dealt personally with those who have been disconnected or who are in default with electricity boards will know that such people normally fall within the categories that I have outlined.
There has also been no clarification about with whom contact should be made or how, whether it should be in person, in writing, by telephone, to the accounts department or to a showroom. A customer may believe himself to have made contact, but that will not prove sufficient. For all those reasons, we would prefer that the additional protection that will be afforded customers will not be dependent on their making the contact. In any case, at least the "who" and the "how" should be defined and the administrative procedures explained.
The proposed modification still leaves the question of access to pre-payment meters rather vague. We were told by the Secretary of State that electricity consumers would have a new right to demand a pre-payment meter, but that appears to be only at the point of disconnection or in lieu of a deposit. It is absolutely right that pre-payment meters should be provided as an alternative to disconnection, but there is no reason why a consumer should have to reach that point before being able to make such a choice. Every consumer should have the right to choose to have supply through a pre-payment meter at any stage. Wider availability of such meters would help to prevent the build-up of debt. Problems arise when one cannot meet one's quarterly bill, and one way of avoiding that problem is to pay for one's electricity as one goes along, by means of a pre-payment meter.
We are pleased that the Government are at last making some moves on the issue of disconnections and are no longer simply asserting that the voluntary code is suifficient in either its content or application. However, it would be even better if a full and comprehensive code of practice were written into the Bill. We attempted to do that in Committee, but, of course, it was not accepted. Such a code of practice would make clear the rights and obligations of both consumers and suppliers and would enshrine the principle of a right to warmth and light. That is what we hoped would happen, but, unfortunately, the Government were not able to accept it. We hope that the measures that will be brought forward and written into the licence will achieve Mr. McKinnon's aspiration of making disconnections a thing of the past. We urge the Secretary of State to adopt our suggestions.
I do not know whether the hon. Member for Gordon will want to press his amendment to a vote. If he does, the official Opposition will support him.
Whether or not the Secretary of State meant to say what he did in Committee, we believe that he must take action so that even if a code is not included in the Bill, there will at least be a code in the licences to give direct specifications to the supply boards about how they should treat customers who have fuel debt and about the availability of pre-payment meters. Such meters should be available throughout the country, not just in some area or supply boards.
We hope that the Minister will show some good will and that that will happen. We said in Committee that we did not wish to divide the Committee, and we do not wish to divide the House on this issue. However, as Mr. McKinnon said of gas, we hope that electricity disconnections will become a thing of the past.

Mr. Michael Spicer: The hon. Member for Rother Valley (Mr. Barron) is right that pre-payment meters will not be available on demand except as a substitute for a demand of security. However, under clause 21 the director will have powers to arbitrate if he thinks that there is any unfairness in any dispute where there is demand but where the company does not wish to give pre-payment metering, if he thinks that pre-payment metering would help people.
In answering both the hon. Member for Rother Valley and the hon. Member for Gordon (Mr. Bruce), I shall speak only briefly now because we have already had lengthy discussions on this subject. The number of disconnections has been falling, by and large, throughout the country over a three-year period. Therefore, although I do not think that the hon. Member for Gordon was relating disconnections specifically to weather conditions, I should like to put on the record that I do not think that it is right to do that.
On the understandable question that the hon. Member for Gordon asked me at Question Time and to which he has again referred, we have not yet been able to bring forward the licence conditions that will apply to the problem that he has outlined. I confirm what my right hon. Friend the Secretary of State told the Committee; these codes will be the subject of licence conditions. There is no doubt about that. But, as the hon. Member has said, and as my right hon. Friend said in Committee, we want to make sure that they are absolutely on a par with the code that is currently under discussion between Mr. McKinnon and British Gas.
The problem that we face is that there has been a round of consultations between Mr. McKinnon and the industry, as a result of which he is making proposals further to strengthen the conditions. We do not want the conditions that we attach to licences for the electricity industry to be in any way weaker that those in respect of gas. The only issue at the moment is to make sure that the two sets of conditions are comparable—preferably indentical. The wait for the outcome of the gas discussions is all that is holding us up at the moment. That is why we have not been able to bring the conditions forward for this stage of the parliamentary deliberations. Certainly, we shall want to do so before the Bill receives Royal Assent. I hope that what I have said amounts to a substantive answer to the hon. Gentleman's legitimate concern about this matter.
Amendment No. 116 suggests that where there is some form of payment arrangement, that arrangement provides security. Manifestly it does not. It is not an alternative to prepayment as a form of security. Therefore we cannot accept amendment No 116. Nor,


I fear, can we accept No. 115, because the industry and the Government already accept the principle that if a payment arrangement allowing both the recovery of an outstanding debt and payment for future charges is entered into and is kept, disconnection should not be necessary. That is clearly set out in the industry's voluntary code of practice on the payment of bills. The public electricity suppliers will be required, as a condition of their licence to produce a code and to agree it with the director. Thus, I think that the spirit of amendment No. 115 is met.
In relation to amendment No. 152— indeed, this is implied in amendments No. 115— we cannot accept the idea that the existence of a pre-payment meter itself constitutes some sort of security that debt will be settled. Manifestly, that is not the case. The substance of amendment No. 152 was referred to in Committee. I think that it was I who pointed out that 15 working days are allowed for payment of bills and that this reflects existing practices within the industry. In England and Wales, some 166,000 consumers are billed monthly, so the 28-day condition is not appropriate for them.
The second part of the amendment leads me briefly to remind the House that, for the first time, the supplier will have to go through a formal procedure before he can disconnect a consumer. In any case, there can be no disconnection where there is a genuine dispute. In addition, under the licence, the public electricity supplier will be obliged to produce a code of practice on payment of bills, including arrangements, for people having difficulty meeting their bills. While I am unable, at the moment to give the details of the conditions, I can say that it is intended that a distinction shall be made between those who cannot pay their bills and those who will not pay their bills. That is a perfectly fair distinction to make.
I think that we are meeting what all sides of the House undoubtedly want, which is that pre-payment meters should be available as an alternative to security; that where people want a pre-payment meter, but are not offered one by the supplying company, the director shall arbitrate; and that there shall be written into the licences a code of practice that will ensure that all this is done fairly and in the best interests of consumers.
Given that that is the spirit behind the amendments, and behind the Labour party's pronouncements on this matter, I very much hope that the hon. Member for Gordon will not press the amendments.

Mr. Malcolm Bruce: I am grateful to the Minister for clarifying the position on the code of practice. It is a little disappointing, although I understand the reasons, that it is not possible to shed any more light on the nature of the code of practice that we discussed in Committe. The hon. Member for Rother Valley (Mr. Barron) has pointed out, quite rightly, that there was not much support from the Secretary of State's own side for his commitment to an improved code of practice. Possibly that is because he had not told his hon. Friends his view before he entered the debate at the end. There is a feeling that some Conservative Members are less than sympathetic to the need for this kind of code of practice. However, I accept that the Secretary of State and the Under-Secretary are not in that category that they are determined that the agreement in respect of gas should be applied to electricity.

Mr. Barron: We should not jump to too many conclusions. The hon. Member for Gordon (Mr. Bruce) will recall that the Minister said earlier that there was no question but that this would be written into the licences. Well, it was not in the draft licences. We can only assume that at that time the Government were going to let the industry draw up its own supply codes. It is because of what happened in Committee that a supply code will be written into the draft licence.

Mr. Bruce: The hon. Gentleman is absolutely right. It is very interesting that in Committee the Secretary of State was clearly somewhat stung by the attack— though perhaps that is an internal matter for those who were present. Perhaps he decided on the spot that the Opposition's arguments were correct. Perhaps he decided that the suggestion that there should be a worse code of practice for electricity consumers than for gas consumers was ludicrous and indefensible, and determined, at that point, to do something about it. I accept that he is still committed to that position, but he has not actually come up with the answer. Obviously, that makes the position a little difficult for us at this stage.
The Minister took issue with me on the question of security. I feel that the reference to security is a sufficient undertaking to the supplier. The amendment says:
'Security' means any arrangement in consequence of which a public electricity supplier may be assured of payment of money due to him and shall include a deposit …in favour of such supplier.
It seems to me that that is a pretty clear definition of "security"— meaning that the supplier will get his money, and that there is an adequately agreed method: by paying a deposit up front, or by going for a meter, or by some mutually agreeable standing order arrangement, both sides having the right to appeal to the director.
As the Minister will appreciate, I do not claim total credit for the amendment or its contents. It has been thought through, and I believe that it would write into the Bill a specific defence for those who face the possibility of disconnection. I should like to give the lie to, or lay to rest, any suggestion that I or my colleagues, or any Opposition Member, is interested in enabling people who can pay their electricity bills to get away with failing to do so. I believe that the wording of the amendment takes care of that. People in that category could be forced to pay a deposit, or to set up an unbreakable standing order, or to provide some other kind of security. But people who cannot pay would have the option of a meter or a direct payment, such as is provided by the fuel direct scheme, from social security. That seems to me to be a very considerable improvement on the present arrangement, and will ensure that the supplier gets his money— which I think is quite reasonable, even though suppliers' charges are too high — and that the customer is able to keep up with payments because they are geared in a way enabling him to pay as he goes along and to monitor both the cost and the level of consumption.
I hope that the Minister will accept that I am not being churlish when I say that I wish to divide the House. I believe that we do not have a firm enough position on the record. If the amendment were included, it would improve the Bill considerably. It would in no way be incompatible with the code of practice, but rather it would help to stiffen the contents of the code of practice that we have not yet seen. The issue is sufficiently important to divide the House.

Question put, That the amendment be made—

The House divided: Ayes 146, Noes 226.

Division No. 147]
[4.29 pm


AYES


Abbott, Ms Diane
Holland, Stuart


Adams, Allen (Paisley N)
Home Robertson, John


Allen, Graham
Hood, Jimmy


Anderson, Donald
Howarth, G. (Cannock &amp; B'wd)


Archer, Rt Hon Peter
Howells, Dr. Kim (Pontypridd)


Armstrong, Hilary
Hughes, John (Coventry NE)


Banks, Tony (Newham NW)
Hughes, Robert (Aberdeen N)


Barnes, Harry (Derbyshire NE)
Hughes, Roy (Newport E)


Barnes, Mrs Rosie (Greenwich,
Hughes, Sean (Knowsley S)


Barron, Kevin
Hughes, Simon (Southwark)


Beckett, Margaret
Jones, Barry (Alyn &amp; Deeside)


Beith, A. J.
Jones, leuan (Ynys Môn)


Benn, Rt Hon Tony
Jones, Martyn (Clwyd S W)


Bermingham, Gerald
Kaufman, Rt Hon Gerald


Bidwell, Sydney
Lambie, David


Blair, Tony
Lamond, James


Boateng, Paul
Lestor, Joan (Eccles)


Bray, Dr Jeremy
Lofthouse, Geoffrey


Bruce, Malcolm (Gordon)
Loyden, Eddie


Buchan, Norman
McAllion, John


Buckley, George J.
McAvoy, Thomas


Caborn, Richard
Macdonald, Calum A.


Callaghan, Jim
McKay, Allen (Barnsley West)


Campbell-Savours, D. N.
McKelvey, William


Carlile, Alex (Mont'g)
Maclennan, Robert


Clark, Dr David (S Shields)
Madden, Max


Clelland, David
Mahon, Mrs Alice


Coleman Donald
Marek, Dr John


Cook, Robin (Livingston)
Marshall, David (Shettleston)


Corbett, Robin
Maxton, John


Corbyn, Jeremy
Meacher, Michael


Cox, Tom
Michie, Bill (Sheffield Heeley)


Crowther, Stan
Mitchell, Austin (G't Grimsby)


Cummings, John
Morgan, Rhodri


Cunliffe, Lawrence
Morris, Rt Hon A. (W'shawe)


Cunningham, Dr John
Mowlam, Marjorie


Dalyell, Tam
Mullin, Chris


Dixon, Don
Murphy, Paul


Doran, Frank
O'Brien, William


Duffy, A. E. P.
O'Neill, Martin


Dunwoody, Hon Mrs Gwyneth
Orme, Rt Hon Stanley


Eadie, Alexander
Patchett, Terry


Eastham, Ken
Pendry, Tom


Evans, John (St Helens N)
Pike, Peter L.


Ewing, Harry (Falkirk E)
Powell, Ray (Ogmore)


Fatchett, Derek
Prescott, John


Faulds, Andrew
Quin, Ms Joyce


Field, Frank (Birkenhead)
Rees, Rt Hon Merlyn


Fisher, Mark
Richardson, Jo


Flannery, Martin
Roberts, Allan (Bootle)


Flynn, Paul
Robertson, George


Foot, Rt Hon Michael
Rogers, Allan


Foster, Derek
Rooker, Jeff


Foulkes, George
Ross, Ernie (Dundee W)


Fraser, John
Rowlands, Ted


Fyfe, Maria
Ruddock, Joan


Garrett, John (Norwich South)
Salmond, Alex


Garrett, Ted (Wallsend)
Sheldon, Rt Hon Robert


George, Bruce
Skinner, Dennis


Godman, Dr Norman A.
Smith, Andrew (Oxford E)


Golding, Mrs Llin
Smith, C. (lsl'ton &amp; F'bury)


Gordon, Mildred
Smith, Rt Hon J. (Monk'ds E)


Gould, Bryan
Snape, Peter


Grant, Bernie (Tottenham)
Soley, Clive


Griffiths, Nigel (Edinburgh S)
Stott, Roger


Griffiths, Win (Bridgend)
Taylor, Matthew (Truro)


Grocott, Bruce
Thompson, Jack (Wansbeck)


Hardy, Peter
Turner, Dennis


Harman, Ms Harriet
Wall, Pat


Haynes, Frank
Wareing, Robert N.


Heffer, Eric S.
Welsh, Michael (Doncaster N)


Henderson, Doug
Williams, Rt Hon Alan





Williams, Alan W. (Carm'then)
Tellers for the Ayes:


Wise, Mrs Audrey
Mr. Archy Kirkwood and Mr. Menzies Campbell.


NOES


Adley, Robert
Fry, Peter


Aitken, Jonathan
Gale, Roger


Alexander, Richard
Gardiner, George


Alison, Rt Hon Michael
Garel-Jones, Tristan


Allason, Rupert
Gill, Christopher


Amess, David
Glyn, Dr Alan


Amos, Alan
Goodson-Wickes, Dr Charles


Arbuthnot, James
Gow, Ian


Arnold, Jacques (Gravesham)
Greenway, Harry (Ealing N)


Ashby, David
Gregory, Conal


Atkins, Robert
Griffiths, Sir Eldon (Bury St E')


Atkinson, David
Grist, Ian


Baker, Rt Hon K. (Mole Valley)
Ground, Patrick


Batiste, Spencer
Gummer, Rt Hon John Selwyn


Bennett, Nicholas (Pembroke)
Hague, William


Benyon, W.
Hamilton, Hon Archie (Epsom)


Biffen, Rt Hon John
Hanley, Jeremy


Blackburn, Dr John G.
Harris, David


Bonsor, Sir Nicholas
Hayes, Jerry


Boscawen, Hon Robert
Hayhoe, Rt Hon Sir Barney


Boswell, Tim
Hayward, Robert


Bottomley, Peter
Heseltine, Rt Hon Michael


Bottomley, Mrs Virginia
Hill, James


Bowden, Gerald (Dulwich)
Hogg, Hon Douglas (Gr'th'm)


Bowis, John
Holt, Richard


Braine, Rt Hon Sir Bernard
Hordern, Sir Peter


Brandon-Bravo, Martin
Howarth, Alan (Strat'd-on-A)


Brazier, Julian
Howarth, G. (Cannock &amp; B'wd)


Bright, Graham
Howell, Ralph (North Norfolk)


Brooke, Rt Hon Peter
Hughes, Robert G. (Harrow W)


Browne, John (Winchester)
Hunt, David (Wirral W)


Bruce, Ian (Dorset South)
Hunt, John (Ravensbourne)


Buchanan-Smith, Rt Hon Alick
Hunter, Andrew


Buck, Sir Antony
Hurd, Rt Hon Douglas


Budgen, Nicholas
Irvine, Michael


Burns, Simon
Irving, Charles


Burt, Alistair
Jack, Michael


Butcher, John
Janman, Tim


Butterfill, John
Jessel, Toby


Carlisle, Kenneth (Lincoln)
Johnson Smith, Sir Geoffrey


Carrington, Matthew
Jones, Robert B (Herts W)


Carttiss, Michael
Jopling, Rt Hon Michael


Chalker, Rt Hon Mrs Lynda
Kellett-Bowman, Dame Elaine


Channon, Rt Hon Paul
Key, Robert


Chapman, Sydney
King, Roger (B'ham N'thfield)


Chope, Christopher
Kirkhope, Timothy


Clark, Hon Alan (Plym'th S'n)
Knapman, Roger


Clark, Sir W. (Croydon S)
Knight, Greg (Derby North)


Conway, Derek
Lamont, Rt Hon Norman


Coombs, Anthony (Wyre F'rest)
Lang, Ian


Coombs, Simon (Swindon)
Latham, Michael


Cope, Rt Hon John
Lawrence, Ivan


Couchman, James
Leigh, Edward (Gainsbor'gh)


Cran, James
Lennox-Boyd, Hon Mark


Critchley, Julian
Lester, Jim (Broxtowe)


Curry, David
Lightbown, David


Davies, Q. (Stamf'd &amp; Spald'g)
Lilley, Peter


Day, Stephen
Lloyd, Sir Ian (Havant)


Devlin, Tim
Lloyd, Peter (Fareham)


Dicks, Terry
Lord, Michael


Dorrell, Stephen
McCrindle, Robert


Douglas-Hamilton, Lord James
MacGregor, Rt Hon John


Durant, Tony
MacKay, Andrew (E Berkshire)


Eggar, Tim
Maclean, David


Emery, Sir Peter
McLoughlin, Patrick


Evennett, David
McNair-Wilson, Sir Michael


Fairbairn, Sir Nicholas
McNair-Wilson, P. (New Forest)


Fallon, Michael
Malins, Humfrey


Favell, Tony
Mans, Keith


Field, Barry (Isle of Wight)
Maples, John


Finsberg, Sir Geoffrey
Martin, David (Portsmouth S)


Fishburn, John Dudley
Mates, Michael


Fookes, Dame Janet
Maxwell-Hyslop, Robin


Forman, Nigel
Mayhew, Rt Hon Sir Patrick


Forsyth, Michael (Stirling)
Mellor, David






Meyer, Sir Anthony
Sayeed, Jonathan


Miller, Sir Hal
Scott, Nicholas


Mills, Iain
Shaw, Sir Giles (Pudsey)


Mitchell, Andrew (Gedling)
Shaw, Sir Michael (Scarb')


Mitchell, Sir David
Shelton, Sir William


Montgomery, Sir Fergus
Shephard, Mrs G. (Norfolk SW)


Moore, Rt Hon John
Shepherd, Colin (Hereford)


Morris, M (N'hampton S)
Shersby, Michael


Morrison, Sir Charles
Sims, Roger


Morrison, Rt Hon P (Chester)
Smith, Tim (Beaconsfield)


Moss, Malcolm
Spicer, Sir Jim (Dorset W)


Moynihan, Hon Colin
Spicer, Michael (S Worcs)


Neale, Gerrard
Squire, Robin


Nelson, Anthony
Stanbrook, Ivor


Neubert, Michael
Stanley, Rt Hon Sir John


Newton, Rt Hon Tony
Steen, Anthony


Nicholls, Patrick
Stern, Michael


Onslow, Rt Hon Cranley
Stevens, Lewis


Page, Richard
Stewart, Andy (Sherwood)


Paice, James
Stradling Thomas, Sir John


Patnick, Irvine
Sumberg, David


Patten, Chris (Bath)
Summerson, Hugo


Patten, John (Oxford W)
Taylor, Ian (Esher)


Pawsey, James
Tebbit, Rt Hon Norman


Porter, Barry (Wirral S)
Thurnham, Peter


Portillo, Michael
Tredinnick, David


Powell, William (Corby)
Trotter, Neville


Price, Sir David
Wakeham, Rt Hon John


Raffan, Keith
Walden, George


Raison, Rt Hon Timothy
Walker, Bill (T'side North)


Rathbone, Tim
Wardle, Charles (Bexhill)


Redwood, John
Wheeler, John


Riddick, Graham
Widdecombe, Ann


Ridley, Rt Hon Nicholas
Yeo, Tim


Rossi, Sir Hugh
Younger, Rt Hon George


Rost, Peter



Rowe, Andrew
Tellers for the Noes:


Rumbold, Mrs Angela
Mr. David Heathcoat-Amory and Mr. John Mark Taylor.


Ryder, Richard



Sackville, Hon Tom



Sainsbury, Hon Tim

Question accordingly negatived.

Clause 20

SPECIAL AGREEMENTS WITH RESPECT TO SUPPLY

Amendments made: No. 17, in page 16, line 29, after '19', insert

'and (Additional terms of supply)'.

No. 18, in page 16, line 47, after '19', insert 'and (Additional terms of supply)'.—[Mr. Michael Spicer.]

Clause 21

DETERMINATION OF DISPUTES

Amendments made: No. 19, in page 17, line 7, after 'to', insert

'19, (Additional terms of supply) and 20'.

No. 20, in page 17, line 16, after 'to', insert

'19, (Additional terms of supply) and 20'.

No. 21, in page 17, line 18, leave out from 'section' to `may' in line 23 and insert

'the Director may give directions as to the circumstances in which, and the terms on which, the supplier is to continue to give the supply pending the determination of the dispute.

(3) Where any dispute arising under section 19(1) above fails to be determined under this section, the Director may give directions as to the security (if any) to be given pending the determination of the dispute.

(3A) Directions under subsection (2) or (3) above.'.—[Mr. Michael Spicer.]

Clause 23

ORDERS FOR SECURING COMPLIANCE

Mr. Michael Spicer: I beg to move amendment No. 22, in page 18, line 3, leave out
'has contravened and is likely again'
and insert 'is likely'.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take Government amendments Nos 23 to 25, Government amendment No. 27 and amendment No. 191, in clause 46 page 35, line 45, at end add—
`(e) include a financial statement surveying costs for each area board during that year.'

Mr. Spicer: I merely want to say, by way of proposing the amendments, that there was some discussion about these issues in Committee. I believe that the hon. Member for Cardiff, West (Mr. Morgan) in particular argued that the director general should have powers to take action if he has clear reasons for believing that action contrary to licence conditions is likely to be taken. If the amendments are acceptable to the House that point will be met. The director general will be able to take action if he has legitimate reasons for believing that action contrary to licence conditions is likely to be taken.

Mr. Tony Blair: The purpose of amendment No. 191 is to ensure that, when the director general makes a report to the Secretary of State— as under clause 46 of the Bill he will be obliged to do— on his activities during the year, he includes a financial statement surveying the costs for each area board during that year. It is entirely appropriate on this day, when we will be debating a series of amendments concerning the rights and needs of consumers, that we ask what price the consumers will be required to pay for this legislation. At the end of the day— no matter how many discussions that people who are fond of debating the industry structure may wish to have—what the ordinary consumer will ask is, "Will privatisation improve the service and will it bring down bills?"
The boast of the Secretary of State about this legislation was that this privatisation is somehow different from gas and British Telecom because there is no monopoly. The criticism that was implicitly acknowledged by him was that gas and British Telecom had gone wrong as privatisations because there was a monopoly element in relation to consumers. However, for the vast majority of consumers, that is exactly what has happened here. The consumer will deal with the same electricity board as now, with no ability to transfer custom if he is dissatisfied with the service, and with no opportunity to hold the electricity board publicly accountable, because it will no longer be publicly owned.
4.45 pm
If we have learnt anything from privatisation, it is surely that, when one turns a public monopoly into a private monopoly, one combines in the worst way possible public service and private profit. One has the need to use without the right to choose. That will exactly describe the plight of Britain's 22 million electricity consumers following privatisation.
When we examine what the Bill includes for consumers, we must point out first that there will be no choice in relation to the area board used and that, of course, the grid system will be a monopoly owned by those area boards.
The only element of competition comes twice removed from the consumer in generation. Yet I believe that, if the Committee stage of the Bill accomplished anything, it exploded the notion that the duopoly that will be created—big G and little G owning the generating capacity—will make it at all likely that there will be any true competitive element operating within the scheme. In other words, as it became increasingly apparent during Committee, the Government are driven to rely on the public sector regulator to give any credibility at all to their notion of public accountability.
We have been told of all the independent power projects that are due to flood the system. We have consistently asked for details of the 20 power projects that the Government say are awaiting us in the new privatised structure, but we have not yet been given them. At one point in Committee I thought that we might have been promised them, but perhaps we can have them now. I suspect, however, that on examination many of those projects will turn out to be nothing more sophisticated than bids by various fuel suppliers or power plant builders to ensure that they are in on the act after privatisation.
The Secretary of State continually said throughout the Committee proceedings that this was no longer a cost-plus system. I suppose he meant by that that we were no longer in a situation where the costs would be simply passed on to the consumer. Yet it is extremely difficult to envisage how that is not the case. Most of the contracts for power generation will be long term. Many will be on a take-or-pay basis. If the regulator is involved at all, he will be involved when those contracts are first concluded and agreed.
The licence agreement that governs the area boards in what they charge the consumer will operate according to the formula RPI minus X plus Y. We do not know what X is, we do knot know how Y is formulated, and we find in the licence conditions that, even after the formula has been set for the area boards, they will be permitted to exceed it by what is called in the licence "the permitted percentage". That is an excess by which the area boards will be able to exceed whatever targets the regulator sets. Yet again, when we look at the licence to discover what the permitted percentage is, another blank appears. So often in our debates, when we get down to the detail of what awaits the consumer after privatisation, we face a blank. The truth is that this is a bill without any specific charges in it at all.
If we wanted any proof as to what will happen to prices after privatisation, the proof is with us already—it was 9 per cent. last year, because of privatisation raising the rate of return, and 6·5 per cent. this year. We now know that the rate of return will be raised from 5 to 8 per cent. for nationalised industries. I suspect that that is to provide the colour of an excuse, so that area boards and the privatised electricity industry will have written into their regulatory structure a minimum rate of return of 8 per cent. Perhaps the Minister and the Secretary of State can confirm that. If the Secretary of State is right—although we can never be sure when dealing with figures whether he is right or wrong—he is talking about £30 billion of investment over the next few years, at an 8 per cent. rate of return. That will have a dramatic upward pressure on prices. In relation to the nuclear industry, we know that the higher the rate of return, the higher the nuclear tax that consumers will pay for nuclear power.

Mr. Geoffrey Lofthouse: Does my hon. Friend appreciate—does the Minister appreciate—that during the past three years the CEGB's costs for the nuclear fuel cycle have increased by £460 million? That is a 53 per cent. increase. Who will pay for that—the consumer?

Mr. Blair: My hon. Friend is absolutely right to point out that rise. He is also right that it will be the consumer who will pay along with the taxpayer, as we shall see later.
The irony of the Bill is that, whereas the profit from the electricity industry moves to the private sector, much of the risk and liability stays in the public sector. The Government can no longer seriously maintain that prices will fall. Although it is true that back in the heady days of 1987 when the Secretary of State was first talking about the proposals he wrote an article in the Daily Express
How I am going to cut your electricity bills".
We get little from the Government even to remotely suggest that bills will come down. Instead they have mounted a fairly defensive exercise to say that bills will not go up as much as Labour says.
The truth is that replacing the downward pressure on costs—that was the slogan of the Government—is an inexorable upward pressure on costs as a result of privatisation. The Government's only real hope of prices falling after electricity privatisation lies in fuel costs coming down. In other words, something entirely extraneous to the process of privatisation. That is the only vestige of respectability that the argument for falling prices has left.
I have often said that one of the extraordinary things about the Bill as it moves through the House is that whether the discussion has been about prices, the nuclear tax or the costs of flotation, even the least curious Conservative Members would want to know what it is going to cost their constituents. The cost of flotation is a prime example of that.
The analysis we provided in Committee suggested that the cost of flotation, as a percentage of the proceeds, would be about 5 per cent. If that calculation is repeated on figures such as those given in the newspapers regarding what the industry will fetch on the market—about £18 billion—we are talking about flotation costs of about £900 million, which represents a £25 premium or special additional surcharge on every household in the country.
Yet we have been consistently denied any explanation from the Government as to whether they think that that calculation is wrong or wildly inaccurate. They have given no estimate themselves as to what they consider to be the costs of flotation. If they say, "We never normally provide that" then perhaps it is about time that they did. Surely that is one of the things that we are entitled to take into consideration when deciding whether to support this Bill.

Mr. Alexander Eadie: Does my hon. Friend realise—it was published quite recently—that because the Bill is doing so badly the Government intend to spend another £20 million on advertising?

Mr. Blair: My hon. Friend is absolutely right. If £20 million were the sum total we would consider that we had got off fairly lightly, but, unfortunately, that is not so. The CEGB has allocated £76 million this financial year to be spent on privatisation—this does not include the cost of the flotation itself; it is all pre-flotation costs. That does not include the promotion costs of the flotation or,


perhaps most important, any of the costs of the area boards or of the national grid as a result of privatisation. That is why it is right to ask for figures from the Minister so that we know exactly what we are up against.
One interesting aspect of the presentation given by Mr. Baker to electricity board managers a short time ago was a document presented by Lazard Brothers, who are advising the new National Power—big G—on the financial aspects of the privatisation. That document says quite clearly exactly what we can expect as consumers and taxpayers from privatisation. It states:
The challenge to be faced in the reorganisation of the industry cannot be overstated. A restructuring of this sort so close to flotation is unprecedented in its scale and complexity … the reorganisation of the electricity industry raises fundamental problems of logistics.
It also states that a considerable marketing exercise will be required to establish the commercial credibility of the new National Power company. All of this, helpfully admitted by Lazards, will be paid for by us, the consumer and the taxpayer. We shall have advertisements promoting a sale that no one wants. That is what is so wrong with this privatisation.
We have had opinion polls that show almost 70 per cent. of the population oppose the privatisation, as they oppose water privatisation. The Government made no effective attempt to persuade public opinion during the Committee. They believe that if they have a majority here that obviates the need to explain to people why they are carrying on with this privatisation process. The answer is that they are doing it for no other reason than privatisation itself.
This essential public service that we all need to use will be privatised at enormous cost to the consumer and the taxpayer at a time of immense uncertainty in the industry. There can be nothing more irresponsible than to embark upon that process, but I am afraid that there is nothing more typical of the Government.

Mr. Peter Hardy: I suppose that any Government are obliged to give serious consideration to the values or dogmas that they hold dear. However, they also have an obligation to the nation to see that the application of those dogmas is not prejudicial to the interests of the community and the country. Unfortunately, there is cause for grave concern about the effects of Government policies on the price of the electricity paid for by the domestic consumer and by industry.
Since the introduction of the Bill I have had a number of discussions with people engaged in the special steels industry. Only the other day I met people from the Iron and Steel Trades Confederation—men who work in the Rotherham works of the engineering steels industry, who are represented by my hon. Friend the Member for Rotherham (Mr. Crowther) and myself. We meet representatives of that industry frequently and high on the agenda is the price of electricity. In our area we produce steel by the electric arc method and the price is significant.
Those steel workers who were worried about the price of electricity have, during the past decade, broken world record after world record. They take pride in the superb achievements of their works and the knowledge that their skill has made them most competitive. They deeply resent the fact that, last year, there was a 9 per cent. increase in

electricity charges followed by a 6 per cent. increase this year. Those price increases could take the competitive edge off their industrial endeavours.
They are conscious of the fact that if we are to build from the ashes of deindustrialisation that the Government have inflicted on the country during the past decade, industries with the potential to export should be able to expect Government assistance and encouragement rather than the introduction of enormous economic strategic disincentives.
For example, I calculated that last year's electricity price increase would make a 4 per cent. increase in the cost of our steel production inevitable. When the special steels industry of Britain is competing with that of Germany, Japan and other steel producers, it is nonsense for the Government deliberately to embark on a policy that forces up the industry's prices and takes off its competitive edge. However, that is what has happened.
My hon. Friend the Member for Sedgefield (Mr. Blair) virtually invited the House to look at the realities of this increase. When the 9 per cent. increase was imposed, the Secretary of State—who I know cannot be with us, but I doubt whether he or the Under-Secretary could deny this—made it absolutely clear that the increase was necessary to provide the electricity industry with an investment capacity. However, the industry had already budgeted for an investment of just over £1,000 million, of which the Secretary of State for Energy appeared to be unaware. He said that we had to make an increase in excess of £1,000 million so that the CEGB could invest.
5 pm
The Minister knows that, in Committee, I made a number of attempts to secure from him the actual record of investment following that 9 per cent. increase in prices. Capital expenditure by the electricity supply industry in 1987–88 was £1,089 million and that approved in 1988–89 was £1,474 million—little more than the amount that would have been spent by the industry without the 9 per cent. increase in prices. The amount planned for next year is little more than would have been fulfilled by the electricity supply industry without this year's 6 per cent. increase in prices—let alone the 9 per cent. increase of last year.
I know—as do the steel workers of my area—why the 9 per cent. and 6 per cent. increases were applied. It was to ensure that, despite the existing burdens on domestic consumers—millions of whom find it difficult to pay their bills—and despite the enormous trade deficit we have as a result of the Government's incompetence and negligence, consumers must also bear the burden of increased costs of production.
The Government give no priority to industry, and I regret that organisations such as the CBI and others that are supposed to represent Britain's important industries tend to be supine in their criticism of Government policies which are not in the interests of British industry. Sooner or later, a Government will have to take office who recognise that the job of exporting and matching the enormous deficit now facing the United Kingdom requires a different set of priorities. Such a Government would not force industry and domestic consumers to bear enormous price increases only in order to provide the Government with a sweetener to enable them to privatise the industry.

Mr. Frank Haynes: In Committee and on Report we have been constantly told that the Bill is in the interests of the consumer. That is a lot of rubbish. It is really in the interests of the people who will buy into the industry. It is all right for the Minister to tell us, both in Committee and on the Floor of the House, that ordinary people will be able to buy into the industry. In previous privatisations the Chancellor of the Exchequer had the nerve to stand at the Dispatch Box and say that pensioners would be in the queues to buy shares in the privatisation of our public industries. Some pensioners may have bought a share or two but it was not long before they flogged them to the big-money folk who moved in to buy them off. Organisations and people with big money are the ones who have bought up willy nilly the industries that the Government have privatised.
My hon. Friend the Member for Sedgefield (Mr. Blair) mentioned the regulator who will be acting not in the interests of the consumer but, once again, in the interests of those who will get a rake-off—those whom Conservative Members represent. Conservative Members represent the people with pockets of money—I am not joking. They have put so much money in their pockets that they cannot find enough pockets to hold it.
My hon. Friend the Member for Sedgefield mentioned big G and little G, which reminded me that in my youth there were two first-class Warner Brothers film stars—Humphrey Bogart and Edward G. Robinson. They were always talking about getting hold of big G. They robbed banks and folks in the street for big Gs, which they used to call greenbacks. That is what the Bill is all about. I understand big G and little G and it hurts me because Opposition Members represent ordinary folk in the street. Conservative Members represent people in big business—by God, they look after them.
While the Minister is listening, I shall tell him something else. I am terribly disappointed that the Secretary of State is not here. He is swanning around in Concorde in the Soviet Union when he should be here delivering this wicked Bill for the privatisation of electricity. He has ducked out of his responsibility and nipped across to have a word with Gorbachev, perhaps to try to convince him to sell off his electricity industry. He will have a job over there, although it appears that he has a simple job here.

Mr. Hardy: I knew that the Secretary of State was away but I did not know that he was travelling in Concorde. If so, his journey time must be short enough to allow him to fulfil both his obligations—the one here and the one in Russia.

Mr. Deputy Speaker: Order. I fail to see how any of this can possibly arise under any of the amendments before the House.

Mr. Haynes: No. I shall duck out of that one.
I am making the point that the Secretary of State should be here, delivering the Bill through the House on the last day on Report, and Third Reading, instead of swanning around in the Soviet Union. Too many Secretaries of State swan around in different places of the world. Half of them live in the stratosphere instead of here, doing their jobs on behalf of the people they are supposed to represent.
I am getting a bellyful from my constituents who, as I told the Minister in Committee, had a bellyful of Sid, when

the Government were flogging off gas. All we saw when we switched on our televisions was Sid. All of a sudden, Sid disappeared and the Secretary of State seems to keep disappearing on this Bill too. In Committee I also suggested that the Government ought to consider seriously their advertisements. My constituents tell me that they know all about our electricity industry, yet the Government keep putting advertisements on television telling us all about it. It is all in the interests of flogging off the industry to those people who have plenty of money but who want to make more. The Secretary of State keeps bumping up the price of electricity—by 9 per cent. last year and by seven point something this year, after we were told that the increase would be 6 per cent. The Minister is riot looking at me—he is looking around the Chamber. I am trying to educate him about my constituents' feelings but I shall be happy to give way to him if he wants to intervene.

Mr. Michael Spicer: I have certainly been listening to the hon. Gentleman, but it takes some concentration because he always makes the same speech. If he made a different one, it would be easier to listen with intense interest.

Mr. Blair: Ministers are so difficult to educate.

Mr. Haynes: I must keep repeating my message until I get it across; some of these Ministers are really thick. They do not listen.
The Opposition are talking sense. We hear a lot of technical rubbish from the Government, but when we get back to our constituencies we hear in no uncertain terms about what people there think about the Government's actions. At the moment, we are talking about the privatisation of electricity——

Mr. Deputy Speaker: Order. We are talking about the amendments before the House.

Mr. Haynes: Come on, Mr. Deputy Speaker, be fair. I am talking about the costs and price of privatisation, and I am telling the Minister how my constituents feel. I am speaking of lower-paid workers, not Members of Parliament, particularly Conservative Members who hold seven or eight directorships as well as this job.
My hon. Friend the Member for Bolsover (Mr. Skinner) raised a point of order earlier about where the money was really going to go. It will not go to the people we represent—it will go to the people the Conservatives represent. The Conservatives always look after their kind, but, as the Minister knows full well, come the next election we shall occupy the Government Benches and the Minister will be here only if he wins his seat.
I am repeating myself for a specific purpose. We shall put the electricity industry right when we return to power, and it will be under public control so that the people out in the country can take the decisions—not a small clique of 300 or so Conservative Members deciding matters for 60 million people in the country. It is true that the Government gave fair warning in their manifesto that they intended to privatise this and other industries. My notes at this point read, "Consumers—ha! ha! ha!" This is a big joke; the Government are not interested in the consumer.
The Government Benches are empty today, but here comes the little lad from Bosworth who made a contribution in Committee last week. I hope that the hon. Member for Bosworth (Mr. Tredinnick) will make one today. Occasionally he makes sensible contributions about


this privatisation. He has probably been outside the Chamber preparing his speech, which I can see on his knees. I hope that he will tell us his real feelings about the people in his constituency. I know plenty of people there; Bosworth is not far from my constituency. At one time it was Labour-controlled——

Mr. David Tredinnick: Not any more.

Mr. Haynes: It will go back to being so——

Mr. Deputy Speaker: Order. Bosworth is not mentioned in the amendments. I hope that we shall get back to them now.

Mr. Haynes: Privatisation affects Bosworth as well as my constituency or Sedgefield or the Minister's constituency. It involves every constituency—even Doncaster, Mr. Deputy Speaker. I do not think that you will pull me up for mentioning Doncaster, which will be seriously affected by the privatisation of electricity. It has a race course, with occasional night racing, for which lights are needed. The race course will be affected by the prices which we will enjoy following privatisation. So put that in your pipe and smoke it, Mr. Deputy Speaker, if you do not mind my saying so. Mr. Deputy Speaker is fair; he gives us the opportunity to speak our feelings, which is what I am trying to do this afternoon. I know that you have pulled me up a couple of times, Mr. Deputy Speaker, but you did not really mean it. The important thing is that many people at the lower end of the income scale are wholly dependent on social security benefits—yet the Government have cut them. Such people will really feel the massive price increases that are on the way.
I know how this will end up: more people will have their electricity cut off, and Members of Parliament will face real problems. When Labour returns to power after the next election, we shall put all that right. We shall reduce the number of cut-offs, introduce fairness and put the money where it is needed, not into the pockets of the rich.
I remember my hon. Friend the Member for East Lothian (Mr. Home Robertson) holding up his poll tax form from Scotland. The poll tax is another way in which the Government are robbing the poor whom we are trying to look after. My hon. Friend held up his poll tax demand and said that it was for £1,000 less than he had paid last year. That shows what the Government are up to. The lower paid and those just above the border line will pay——

Mr. Tredinnick: Will the hon. Gentleman inform the House next that since the privatisation of the gas industry there have been far fewer disconnections?

Mr. Deputy Speaker: Order. I hope that he will not do so on this group of amendments.

Mr. Haynes: You are right, Mr. Deputy Speaker, gas is not mentioned in the amendment. The hon. Gentleman has got himself in a mess and should rephrase his question.

Mr. Tredinnick: I am sorry if I misled the hon. Gentleman. Since the privatisation of the gas industry the

number of disconnections has fallen, so it is likely that the number of disconnections in the electricity industry will likewise fall because of the downward pressure on prices.

Mr. Haynes: The hon. Gentleman has not done his homework. I am suggesting that, because of previous privatisations, prices have risen and gas cut-offs have trebled. After this privatisation there will be more and more cut-offs of electricity——

Mr. Hardy: Does my hon. Friend agree that, in addition to the people who may be disconnected, a growing number of people are likely to need special concessions in the form of pre-payment meters, tokens and so on? These people will pay more for their electricity than those who can afford to pay the higher bills without much trouble.

Mr. Haynes: Exactly. The Secretary of State has talked about the pre-payment meter with a card. That is more costly to the consumer, but the Secretary of State did not mention that. People in the lower income groups will be hit hard.
I am being bombarded by representatives of industry who tell me of how their industries will be affected by the increased costs of electricity. Industry is telling us in no uncertain terms that it is not looking forward to privatisation. I see that the Minister is busy. I hope that he does not need to send his Parliamentary Private Secretary to find an answer to my questions. The problems that I am putting to the Minister are simple and he should fully understand them because the problems in his constituency must be similar to the problems in mine in connection with what will happen after privatisation. People are asking how they will pay their bills. They want to know whether they will be cut off or whether they will have a pre-payment meter put in and pay extra. Will industry in the Minister's constituency pay more and more which will then be reflected in prices? Bread, a necessity of life, will increase in price because of privatisation. That is why we keep pressing the Minister, as we did in Committee, about exactly what will happen under the Bill.
The Government do not listen and that is why Ministers repeat themselves at the Dispatch Box. They will not listen to home truths from Members who really represent the people. Our constituents tell us and we bring the information to the House. There are real problems now in the constituencies, quite apart from the problems that will exist after privatisation. The situation will get worse, but it is a waste of time asking the Minister to consider the issues that we are putting forward. The Minister will not be able to answer my next question because his right hon. Friend the Secretary of State for Energy is not in the Chamber. He is in Moscow, talking, I hope, to Gorbachev.
The Bill will hit our constituents and at this eleventh hour I ask them to withdraw the Bill and leave the industry under public control. That is where it will be when we are in government.

Mr. Alan W. Williams: Amendment No. 191 asks distribution companies to
include a financial statement surveying costs for each area board during that year.'.
That is a modest request. People are greatly concerned about what the Electricity Bill holds in terms of future prices. The same concern applies to the Water Bill because water prices are likely to rise by 50 per cent. or more in the


next few years. The Bill will create a private monopoly because there will he no real competition and no alternative source of supply for the consumer. Each area board will have to make a profit for its shareholders and at the end of the day such profit can come only from the bills that are sent to consumers.
Last year there was a 9 per cent. increase in price and this year there will be a further 6 per cent. rise. There is no justification for either of those rises and it is quite clear that they were imposed simply to fatten the industry for privatisation. About 80 per cent. of our industry relies on coal and the productivity record of our coal industry has been stupendous. There has been a more than 50 per cent. improvement in productivity in the last five years, so there is no justification for the price rises.
At the first sitting of the Standing Committee in January we discussed prices, franchises and the future investment policy of the Central Electricity Generating Board. The justification given for last year's price rise was that the electricity industry needed to embark on a massive investment programme of £45 billion. At that first sitting the arguments advanced by the Secretary of State on that £45 billion figure were torn to shreds. There is no way that the industry requires investment on that scale. It obviously needs new power stations, not PWRs, but proper environment-respecting coal-powered stations. Thanks to my hon. Friend the Member for Sedgefield (Mr. Blair), the figure of £45 billion was knocked into shape. The Government were talking about outturn prices in the year 2000. The correct figure turned out to be £13 billion at present prices. In Committee we destroyed the case for last year's 9 per cent. increase and this year's 6 per cent. increase.
As I have said, the ordinary consumer is greatly concerned about the future price of electricity. That concern is shared by industry. In my part of the world, in south Wales, industry has the highest proportion of electricity demand of any region. Fifty-nine per cent. of electricity produced in south Wales goes to industry. The Merseyside and North-Western electricity board area has the second highest with 56 per cent. Industry faced a price rise of 9 per cent. last year and 6 per cent. this year, but who knows what sort of increase it will face in the years ahead? Such increases affect the competitiveness of British industry.

Mr. Jack Thompson: My hon. Friend is on an important issue and in some ways the matter has gone full circle. The only source of energy for operating industrial machinery is electricity. Machines cannot run on gas or oil or on any other energy source. An increase in electricity prices to the coal industry, which consumes a huge amount of electricity, will push up coal prices and create pressure on the coal industry.

Mr. Williams: My hon. Friend is right. Increases in the price of electricity feed right through industry and result in increases in the price of raw materials such as coal and the price of the manufactured goods that we need to sell on world markets. It crucially affects competitiveness.
Faced with increased charges, many major industries, the large consumers, may decide to opt out of supply from the distribution companies and provide their own independent supply. That will have a knock-on effect on the domestic consumer because prices to the householder will go even higher. We should remember that electricity

costs hear heavily on elderly people, families and the low paid. That compounds the retail prices index. Electricity costs are a small part of a rich person's budget, but for the low paid and the elderly—people who spend most of their time at home—the electricity bill forms a large chunk of their outgoings.
The Bill talks about some kind of mythical downward pressure on prices that might come from increased efficiency. However, shareholders will demand their cut. Where can that money come from other than from higher prices? I recently had a look at the 1987–88 annual report of the CEGB, which has a 50-year history. In the last 30 years electricity prices have fallen in real terms and have dropped below the retail price index.
Part of the reason for that is increased efficiency in t he running of power stations and the generating of electricity. Another part of the reason is that, generally, fuel costs have fallen in real terms.
5.30 pm
I cannot see why the Bill should not contain a clause saying that, over the next 10 years, electricity prices need not rise in real terms so that that pattern is continued. British Coal has offered the CEGB a 10-year price agreement under which the price of coal would be fixed to the retail prices index. In the past five or six years, coal prices have fallen, and that could be continued for the next 10 years. Fuel costs represent the major cost in generating electricity, and 80 per cent. of our electricity comes from the burning of coal, so there is no reason why electricity prices should increase in real terms over the next 10 years.
As a result of the amendment,
a financial statement surveying the cost of each board
would be submitted every year. That is a simple safeguard for consumers. I am certain that the Bill will inevitably lead to higher electricity prices, but there must be transparency about what is happening.

Mr. George J. Buckley: I agree with my hon. Friend that increased electricity prices are the inevitable result of privatisation. However, will not the main pressure to increase prices, as has been stated by the Minister in Committee, be a result of the higher return on capital investment that is bound to be demanded from a privatised electricity industry?

Mr. Williams: My hon. Friend is right. The Government are increasing the rate of return. In an electricity industry in the hands of private shareholders, there are dangers that that will be pushed further. Another pressure on the cost of electricity is the nuclear component that the Government insist on having—the nuclear quota or nuclear tax. The four PWR stations will cost at least £1 billion each, and the electricity that they produce will be uneconomic especially at the high discount rates that the Government are talking about.
The Bill is a cause of great worry for the domestic consumer. People are concerned that, as with water prices, electricity prices will go through the roof over the next few years. That is why the Government should be listening to public opinion. Some 70 per cent. of the people are opposed to the Bill.

Dr. Kim Howells: I commend amendment No. 191. A financial statement for each area board would allow some visible mechanism 'whereby a proportion of the profits that the area boards will undoubtedly rake off from the business of selling electricity can be diverted into vital


research and development by our universities, our centres of research and our centres of excellence. That might put them on a par with the research and development carried out by the large multinational corporations. They will be selling us technologies that at the moment may not be profitable, but in the future will be both vital and profitable. For example, renewable energies and clean burn technologies are being developed and investigated at Grimethorpe. Research is being carried out into the decommissioning processes, about which we know so little but which those on the Government Front Bench blandly assume will be carried out with impunity. There is also research into the storage of nuclear waste. The Government have already admitted that there is a good case for a nuclear tax, which is what it will amount to—let us not try to gloss over it. In other words, there will be a rake off of profits to sustain a ringfence nuclear industry.
Instead of that, why should not a proportion of the profits that will undoubtedly accrue in large amounts go into research and development? That would ensure that in the 21st century we shall not be held hostage by the technologies that will otherwise be designed and developed by the multinational corporations in Japan, the United States and Germany. Why can we not develop them here, so that British industry will be in the forefront of these industries? This amendment would give us some purchase on this otherwise hostile Bill, and mean that the state can insist that the electricity industry pays attention to research and development because, if it does not, the electricity supply industry will fall badly behind.

Mr. Frank Doran: My hon. Friends have made out a clear case as to why amendment No. 191 should be accepted. The principal reason is that, as the consequence of the Bill, the price of electricity will increase considerably. Last year, there was an increase of 9 per cent., and this year an increase of 6 per cent. in England and Wales and 8·5 per cent. in Scotland, all as a direct consequence of the Bill. Additional costs will result from the nuclear levy, and costs of flotation and various other associated costs, and the need for the new privatised companies to increase profits for their shareholders.
We must ask what the Government have to be afraid of that makes them oppose our amendment No. 191. We are simply asking that, in his annual report, the director includes a financial statement so that the consumer can see what the costs are in the various area boards. The Government have claimd that the Bill will introduce competition, but they are refusing us the opportunity to see how that competition will operate in practice and how the costs of the boards match up to one another. That is a simple service to provide the consumer, and the best person to provide it is the director. That is why we have tabled our amendment.
The Government amendments relate mainly to the powers of the director in relation to the companies, and in particular the sanctions that the director will have to ensure compliance with the Act and the various licence conditions. Amendment No. 22 will strengthen the hand of the director. Under the Bill as previously drafted, the director would have had to show that there had been a previous contravention by the licence holder. We argued against that in Committee and were pleased that the Government agreed that the director could anticipate a

contravention on the part of a licence holder. However, amendment No. 25 lets the licence holder off the hook to a certain extent because it gives the director the power to negotiate. I am concerned about that, and I ask the Minister to explain how he sees that operating.
I am particularly concerned about clause 46, which requires the director to produce an annual report. Specifically, clause 46(2)(b) requires him to set out in his annual report
any final or provisional orders made by the Director during that year".
That will exclude boards or licence holders who have transgressed, but who are able to get into a negotiating position because of amendment No. 25, and avoid any publicity that might result from their transgression and the adverse effect on their business that that might involve.
I am also concerned about what would be involved in the failure of any board or licence holder to recognise the order of the director. Apart from the issue of a provisional order or a final order, there is no real sanction on the continually transgressing boards.

Mr. Michael Spicer: In speaking to amendment No. 191, the hon. Member for Sedgefield (Mr. Blair) designated today as consumer day. I must tell the House that, after the passage of the Bill, every day will be consumer day. I shall tell the hon. Member for Ashfield (Mr. Haynes), all others who contributed to the debate and anyone else who cares to listen why that is so. The generating side of the business, which the hon. Member for Sedgefield designated as twice removed, accounts for about 70 per cent. of all the costs that pass through to the consumer. Therefore, it is of some direct interest to the consumer. That side of the business will be subject to stringent competition.
We know of 20 projects with cost structures that are considerably below those that are now the average for the CEGB. I can inform the House of some of them because they are in the public domain. These include Barking, Corby, Roosecote, Leicester and Brigg. I cannot refer to them all because some of them are commercially confidential. However, the cost structures that we have seen are considerably below those of the CEGB.
The Government's case does not rest on the existence or otherwise of 20 new independent projects that will represent anything up to 7·5 GW of potential electricity. Our case rests on fundamentally altering the structure of the generating side of the electricity industry We are changing an industry in which there is only one supplier of electricity in England and Wales. It is that supplier which determines the cost structure of the industry and then passes the consequences of that straight through to the consumer. The fact that we are interposing a new set of pressures on the generating side of the industry constitutes our basic argument that we are doing more for the consumer in one piece of legislation than the Labour party will ever contemplate doing, even in its wildest dreams.
5.45 pm
I call in evidence the pronouncements, for example, of the chief executive designate of National Power, Mr. Baker, whom the Opposition are especially keen to quote. There are also the pronouncements of Mr. Malpas, the chairman designate of PowerGen. The Opposition do not seem to understand that those gentlemen's pronouncements signal a radical change in attitude on the part of undertakings which, for the first time, are having to think


about the market place. Mr. Baker's speech, which was of particular interest to the Opposition in its leaked form, made the position clear for future employees. He was categoric when he said, in effect, "Unless we start to realise that we are in competition from now onwards with other companies, your jobs and our business will be at stake." That is precisely the change in attitude that I call in aid in justifying the argument that the Bill is in the interests of consumers.

Mr. Rhodri Morgan: Are the private generators to which the Minister has been talking willing to proceed on anything other than a take-and-pay basis?

Mr. Spicer: I can tell the hon. Gentleman what I told him only the other day. The motivation of the companies does not reside in any price structure that is either imposed on them or given to them, or in conditions of the sort to which the hon. Gentleman has referred. Instead, it resides in their knowledge of the efficiency with which they will be able potentially to compete with existing players. They know that they have new technologies, ideas, management structures and practices that will enable them to compete with the successor bodies.

Mr. Blair: Perhaps the Minister will care to confirm something that he was not prepared to commit himself to in Committee. Under the contracts concluded by area boards and the duopoly structure—PowerGen and National Power—that the Government are setting up, there will be no yardstick competition prevailing.

Mr. Spicer: The question of contracts is one that is yet to be settled. I have never made any bones about that. There is no secret about it. Nor is there any secret about the fact that the Government intend that the contracts should not be agreed to in a way that will prevent future and further competition.
As for competition——

Mr. Blair: Will the Minister give way?

Mr. Spicer: I shall let the hon. Gentleman intervene later. I wish to develop an important argument.
The hon. Gentleman based his speech on the argument that we are doing nothing for the consumer. I have said already that that is manifestly untrue in respect of generation. Even if the considerations and worries that the hon. Gentleman has presented were realities, the fact remains that the generation side of the industry is to be changed radically. The hon. Gentleman cannot get away from the fact that there is one monopoly supplier. That supplier is to have his monopoly broken, and from now on the industry will be geared up to encourage new entrants.
Incidentally, the amendment refers to area boards. I thought that we would be able to agree that the Bill refers to public electricity suppliers. Area boards will be abolished by the Bill. However, I put that on one side. Opposition Members have argued that competitive pressures will bear too strongly on the public electricity supply companies. For example, large companies or smaller companies will have a right not to contract with their local public electricity supply company. The supply companies will face pressures that have never existed in the past. As they will have the right to charge the tariff structures that they wish to introduce under the regulatory conditions, undoubtedly there will be a measure of competitive pressure that does not presently exist.
Where competitive pressures do not exist, there will be the regulator and the regulatory rules. For the first time, the regulator will have the consumer as one of his prime responsibilities when he comes to focus upon his duties. The regulatory duties that relate to the consumer are spelt out in a way that is different from anything which has existed in the past. That is denied by the hon. Member for Sedgefield, but it is a fact that duties will be placed upon the regulator to regard as paramount the interests of consumers.
Under the Bill, there is a right to the supply of electricity that did not exist previously for anyone with connections, or potential connections, more than 50 yd away from the mains supply. That is another consumer right that has been introduced. There is to be a panoply of new consumer rights under the Bill. At least give us the credit for that. If the companies do not meet certain standards, moneys will be returned to consumers. That is a brand new provision. That is something which the hon. Member for Sedgefield might acknowledge in a debate that is about consumers.

Mr. Blair: The Bill does not do a single thing for consumers that could not be done separately from privatisation. The hon. Gentleman must make a ca se showing why the Government are privatising the industry. So that the public fully understand, will the hon. Gentleman confirm that the ordinary, average consumer will have no choice but to continue contracting with his area board?

Mr. Spicer: The case that the hon. Gentleman must make is in answer to the hon. Member for Ashfield, who said that he wanted to put the industry back into public control. I shall not leave that point alone and I shall certainly address the question "Why privatise?" put by the hon. Member for Sedgefield.
I have already said that customers, including, for instance, those managing large new estates or large blocks of flats, would have the right to opt out—as everyone has—and it might even be a practical proposition—[Interruption.] The hon. Member for Sedgefield is not listening to my answer to his question. Domestic customers will have the right to opt out, and certain managers of large new estates or large blocks of flats may well want to do so——

Several Hon. Members: rose——

Mr. Spicer: I have answered one question put by the hon. Member for Sedgefield and I want to deal with his other questions.
One feature for which no Opposition Member has given credit in the context of a debate on consumer rights, although I am sure that they have understood it, is the new place of the consumers' committees within the regulatory body. For the first time, instead of shouting outside the industry and giving the benefit of their advice to anyone who wishes to listen, consumers' committees will be players involved in the regulatory process. They will have statutory rights that they did not have before. At least the Opposition might congratulate the Government on this new innovative approach to the involvement of consumers' committees within the regulatory authority.

Mr. Lofthouse: Is the hon. Gentleman saying that domestic dwellings can opt out?

Mr. Spicer: I am saying that everyone will have the right to opt out. The question on which, I suspect, the Labour Front Bench will wish to come back to me is whether that is a practical proposition. I have told the House that in certain circumstances the managers of large new estates or large blocks of flats may decide that, at the very least, they want to ensure that their local public electricity supply company understands that they have that right. The pressure that those managers could exert might be satisfactory from the consumers' point of view——

Mr. Deputy Speaker: Order. I hope that we can return more closely to the amendments before the House.

Mr. Spicer: I hesitate to quarrel in any way with your ruling, Sir, but you allowed the hon. Member for Sedgefield to develop an argument against our proposals in relation to consumers.

Mr. Deputy Speaker: Order. The Minister is right. I was a little overrelaxed in allowing a wide debate. The Minister is being given an adequte opportunity to respond to those points which I should not perhaps have allowed. I hope that, now that the matter has been redressed, we shall return to the amendments.

Mr. Spicer: You allowed the Opposition to ask why we were going to privatise, Mr. Deputy Speaker. I am sure that they felt that that question was related to the question of surveying costs for, as they described it, each area board, although it will not be an area board. This matter is relevant and, if I may, I should like to answer the question "Why privatise?" It is a fair question in the context of consumerism and prices.
One reason why we wish to privatise is that the country is faced—this relates directly to the question of surveying costs—with a massive investment programme. We have argued about exactly what it will comprise. The central part of our position is that that investment will not take place on the taxpayers' back, as it would in the public sector.
More fundamentally, it will occur in a form that is not dependent upon political decisions taken behind beige doors in Whitehall but has reference to genuine market needs. That must be a better way of engaging in investment decisions than having decisions that are a result of political infighting, as so many investment decisions are at present.
Because of your strictures, Mr. Deputy Speaker, let me leave aside the issue of increasing further public ownership of shares. By "public ownership of shares" we mean increasing ownership from the present 9 million shareholders and particularly increasing ownership of shares by employees—something about which the Opposition have never liked hearing.
I should like to ask the Opposition a question which we have asked before but to which we have not had an answer. Do they or do they not agree with the Labour Whip, the hon. Member for Ashfield, who jumps from the Front Bench to the Back Benches and makes a statement on the Opposition's behalf that he would renation-alise——

Mr. Deputy Speaker: Order. We are being led back into a Second Reading debate, but we will not have that. Hon. Members must return to the amendments before the

House. I hope that when hon. Members demand flexibility from the Chair they realise the consequences of opening that door.

Mr. Spicer: Of course I bow to your ruling, Mr. Deputy Speaker. I shall ask that question later. I serve notice on the Opposition that, when it is in order, I should like them to say whether public control means renationalisation under a different name.
We have not heard much about the Government's amendments, I suspect, because the Opposition basically agree—[Interruption.] I have been answering the points raised by the hon. Member for Sedgefield, and I think that it is fair for the Government to do that. Hon. Members should not provoke me if they do not want answers.
The Government amendments were suggested after discussion in Committee, as were a number of Government amendments that have been tabled in the past few days, as the Opposition recognise. These amendments relate to the power of the director general to deal with matters when it is likely in his view that a public electricity supplier or licence holder will take actions that may break the licence conditions. The hon. Member for Sedgefield asked whether an enforcement procedure would be provided for in subsequent Government amendments. There is such a procedure. It concerns various levels and is allowed for in the Bill, as a reading of the Bill makes clear. There is no question of enforcement being a problem. I can give that assurance.
These Government amendments have been brought forward in a desire to meet the points made by hon. Members in Committee.

Amendment agreed to.

Amendments made: No. 23, in page 18, line 9, leave out
`has contravened and is likely again'
and insert 'is likely'.

No. 24, in page 18, line 30, leave out
`has contravened and is likely again'
and insert 'is likely'.

No. 25, in page 18, line 38, after 'order', insert—
`(aa) that the licence holder has agreed to take and is taking all such steps as it appears to the Director for the time being to be appropriate for the licence holder to take for the purpose of securing or facilitating compliance with the condition or requirement in question;'.

No. 26, in page 19, line 18, leave out
`the preceding provisions of this part'
and insert
`section 8 or sections 15 to 19, (Additional terms of supply) 20 and 21 above'.—[Mr. Michael Spicer.]

Clause 25

VALIDITY AND EFFECT OF ORDERS

Amendment made: No. 27, in page 21, line 20, leave out `the supplier' and insert 'him'.—[Mr. Michael Spicer.]

Clause 27

REGULATIONS RELATING TO SUPPLY AND SAFETY

Amendment made: No. 28, in page 22, line 25, leave out from 'efficient' to end of line 30 and insert—
`(b) protecting the public from dangers arising from the generation, transmission or supply of electricity, from the use of electricity supplied or from the installation, maintenance or use of any electric line or electrical plant; and


(c) without prejudice to the generality of paragraph (b) above, eliminating or reducing the risks of personal injury, or damage to property or interference with its use, arising as mentioned in that paragraph.'.—[Mr. Michael Spicer.]

Schedule 7

USE ETC. OF ELECTRICITY METERS

Amendments made: No. 29, in page 96, line 22, after `whom' insert
'and the circumstances in which'.

No. 30, in page 98, line 9, leave out from 'supplier' to end of line 10 and insert
'otherwise than in respect of the supply of electricity, the provision of an electric line or electrical plant or the provision of the meter'.—[Mr. Michael Spicer.]

Clause 30

ELECTRICITY FROM NON-FOSSIL FUEL SOURCES

Amendments made: No. 31, in page 24, line 16, leave out from 'made' to end of line 18 and insert—
'(a) such arrangements; or
(b) where a previous order under this subsection has had effect in relation to him, such additional arrangements,
as will secure the result mentioned in subsection (1A) below.
(1A) The result referred to in subsection (1) above is that—
(a) on and after the second day appointed by the order; or'.

No. 32, in page 24, line 22, leave out first 'him' and insert 'the public electricity supplier.'

No. 33, in page 24, line 23, leave out 'this section' and insert 'subsection (1) above'.

No. 34, in page 24, line 29, leave out 'that subsection' and insert 'subsection (1A) above'.—[Mr. Michael Spicer.]

Clause 31

FOSSIL FUEL LEVY

6 pm

Mr. Michael Spicer: I beg to move amendment No. 35, in page 25, line 32, leave out 'makes an order' and insert
'has made one or more orders'.

Mr. Speaker: With this it will be convenient to take Government amendments Nos. 36 to 43.

Mr. Spicer: After the previous debate, I shall be brief, although the Opposition may want me to come back to some points. I shall explain the purpose of the amendments. If the contract between the generator and the supply company contains terms that allow for payments to be made before stations are commissioned, the amendments will allow the costs to be covered through the levy.
The issue is complicated, so the best way to proceed is for me to listen to any Opposition comments and respond to them if necessary.

Mr. Doran: I was interested to hear the Minister's point. My interpretation is that the amendment extends considerably the scope of the nuclear levy and introduces the concept of advance payments. There is no reference to contracts between suppliers and generators, so it seems that the amendment seeks to introduce the concept of payment in advance of the intended nuclear generating

capacity. We have heard of four new generators and we have already referred today to the cost of that scheme, which the Minister put at £38 billion. That is interesting in the context of the debates in Committee. My hon. Friend the Member for Sedgefield (Mr. Blair) often pressed the Secretary of State and the Minister to make clear what was covered by the nuclear levy and it was made clear at that time that it did not cover advance payments.
One possible interpretation of the amendment is that the whole cost of any new generating capacity can be included in those advance payments. In Committee, the Minister conceded that the level of the levy was likely to be in excess of 8 per cent., and gave a figure approaching 10 per cent. when pressed by my hon. Friend the Member for Sedgefield. That is a crucial and fundamental question on a day that is devoted to consumers and prices. The Minister should advise us what extra cost has been added to consumer costs as a result of the amendment, which allows the payment of advance expenses. The Minister conceded a figure of 8 per cent. If we take into account the additional expenditure of about £30 billion between now and the turn of the century, we must be talking about a considerably increased cost. We are entitled to an answer at this stage of the debate.
It is also important to note—although we are talking about a different degree of cost—that amendment No. 40 allows the Government to farm out the whole process. In Committee, the Minister talked about the possible use of a firm of accountants. That is another area where the bureaucratic structure of regulation and the collection of the levy will involve more cost for the consumer. I shall be interested to hear from the Minister what costs he envisages will be involved. The structure required to assess the level of levy and to collect it will be considerable. Amendment No. 36 appears to add substantially to the costs brought within the scope of the levy. We demand to know what that will mean for the consumer.

Mr. Hardy: I had not intended to speak on these amendments, and I want merely to make one point. In his rather long reply to the previous debate, the Minister did not say a word to explain the grossly unsatisfactory situation that faces industries that are high energy users, such as the one in my own constituency to which I referred. The Minister will be aware that, while the Bill was in Committee, the chemical industry expressed deep anxiety about its position. British industry, especially that part of it that uses a great deal of energy, will have found no cause for comfort in anything the Minister has said. He did not appear to address the problem at all.

Mr. Michael Spicer: I must remind the hon. Member for Wentworth (Mr. Hardy) of a point that needs to be made every so often, which is that, in real terms, electricity prices have been falling over the past five years. Industrial electricity prices have fallen by 6 per cent. It also has to be said—and I did not want to raise the point again—that in the five years of the last Labour Government, domestic prices rose by 9 per cent. and industrial prices by 6 per cent. in real terms. The hon. Gentleman asked a question on behalf of the chemical industry or possibly the steel industry—I do not know which. Under the last Labour Government, prices rose in real terms, whereas under this Government prices have fallen in real terms. What substantial case is the hon. Gentleman making?

Mr. Hardy: The Minister overlooks the central point. The Government should be looking at our industrial costs in comparison with those of our competitors. It is no good the Minister saying that electricity prices have fallen in real terms. I would not say whether they have or not. What we must do is to compare the costs faced by British industry with the costs faced by our competitors. As I said in an earlier debate, the competitive edge of British industrial high energy users is considerably blunted as a consequence of the decisions taken last year and this year. It seems that we are justified in being fearful about the effect next year or the year after.

Mr. Michael Spicer: I am grateful for that further intervention, because it gives me the chance to put the record straight. I gave one figure wrongly by 100 per cent. Industrial prices have fallen not by 6 per cent., but by 12 per cent. under this Conservative Government. That is one of those slips of the tongue on which the Opposition would be happy to sit. Industrial prices have fallen by 12 per cent. under this Conservative Government, whereas they rose by 6 per cent. in real terms under the last Labour Government.
The hon. Gentleman made a fair point about competitiveness, so I must point out that if one compares our industrial electricity prices with those of, for example, other European countries, we come in about the middle. If we consider the West Germans, we do much better than——

Mr. Morgan: Not for bulk supply.

Mr. Spicer: The hon. Gentleman refers to bulk supply and industry sometimes makes the case that there is a panoply of special contracts in Europe about which nobody knows much. I have asked the industry from time to time to come up with information that can be publicised about this mass of subterranean contracts which would give a different picture from the one that I have given to the House, but it is difficult to obtain specific, detailed evidence. However, we have published data about electricity prices for industry generally. That shows that British industry as a whole receives electricity at about the median price level compared with other European countries. Nobody denies that.

Mr. Morgan: What about contract prices?

Mr. Spicer: The Government have to go on published data. Private contracts may exist, but such private information is not available to the Government.
The hon. Member for Aberdeen, South (Mr. Doran) asked what was to be included in the levy, and whether the amendment would mean an increase in the levy. I shall make broadly the same point as my right hon. Friend the Secretary of State made in reply to the hon. Member for Sedgefield (Mr. Blair) in Committee. At the moment, the cost of financing nuclear power stations is taken directly, within the price. Whether that will be the case in future, and whether the levy will directly finance nuclear power stations—as it would under the present arrangements—depends on what contracts are struck. In particular it depends on the financing arrangements catered for and the timing of payments under those contracts. Until the contracts have been settled, therefore, I cannot give the hon. Gentleman the answer that he seeks.
What I can say is that the Government will ensure that the contracts strike the right balance between providing a

motivation for the industry to invest in nuclear power stations and ensuring that they do not make excess profit from, and are not wasteful in, that investment to the detriment of the consumer. I can give the hon. Gentleman that assurance.

Mr. Doran: The Minister seems to have confirmed what he refused to confirm in Committee. I want to be clear on exactly what he is saying. The amendment says nothing about contracts. It gives a specific right to the new supply industry to receive payments in certain specific circumstances. The amendment seems to cover the whole cost of providing the capacity and appears to have nothing to do with contracts or the Government's control of those contracts.

Mr. Spicer: The hon. Gentleman is absolutely correct, because the amendments are permissive and allow for the recouping of costs. I am not saying that the costs will be financed as he suggests, because that will depend on how the contracts are struck. At the moment, the industry finances its development directly and passes its costs straight on to the bulk supply tariff. In future, there will, no doubt, be an element of financing, but we cannot tell what the exact result will be until the contracts have been struck. I hope that, on the basis of that explanation, the Opposition will feel able to accept the amendments.

Mr. Morgan: That was a completely unsatisfactory reply. An issue of Electrical Review that came out over Christmas carried the headline "Proposed Contracts are Riskless". The description that the Minister has given is a perfect description of a contract that is riskless for the private sector. The electricity consumer will now have to pay the private generator to build private generating stations. If that is the purpose of the Bill, it is about time the consumer knew it.
My hon. Friend the Member for Aberdeen, South (Mr. Doran) and I spent a long time examining Government amendments Nos. 36 to 43, and concluded that they showed that the nuclear levy is in serious trouble. The Government and the electricity companies do not know, and the consumer and the House certainly do not know, how the nuclear levy will work. It has been devised at a Sir Humphrey's mad hatter's tea party and the amendments show us all just how much trouble the levy is in and just how short a time the Government have left to get it right.
The area boards do not know how the nuclear levy will be collected. They know only that the additional costs of nuclear production over coal production—which John Baker, the chief executive, told us would be 42 per cent. in the financial year that has just started—will be distributed in some way. The proposal cuts completely across the concept at the heart of the Bill and the Idea of direct contracts between generators and suppliers. It looks to us as though the Government are beginning to admit that they have devised a wholly unworkable system for collecting the levy.

Amendment agreed to.

Amendment proposed: No. 36, in page 25, line 42, after `the', insert
'aggregate of the amounts given by subsections (2A) and (2B) below.
(2A) The amount given by this subsection is a one-twelfth part of any advance payments which, in pursuance of qualifying arrangements, fall to be made by the public


electricity supplier during the relevant year; and in this subsection "the relevant year" means whichever one of the following periods the qualifying month falls within, namely—

(a)the period of twelve months beginning on the first day appointed by the first order under section 30 above; and
(b)each successive period of twelve months.

(2B) The amount given by this subsection is the'.

Question put, That the amendment be made:—

The House divided: Ayes 262, Noes 180.

Division No. 148]
[6.16 pm


AYES


Adley, Robert
Dicks, Terry


Aitken, Jonathan
Dorrell, Stephen


Alexander, Richard
Douglas-Hamilton, Lord James


Alison, Rt Hon Michael
Dover, Den


Allason, Rupert
Dunn, Bob


Amess, David
Durant, Tony


Amos, Alan
Eggar, Tim


Arbuthnot, James
Emery, Sir Peter


Arnold, Jacques (Gravesham)
Evennett, David


Ashby, David
Fairbairn, Sir Nicholas


Atkins, Robert
Fallon, Michael


Atkinson, David
Favell, Tony


Baker, Rt Hon K. (Mole Valley)
Field, Barry (Isle of Wight)


Baker, Nicholas (Dorset N)
Finsberg, Sir Geoffrey


Baldry, Tony
Fishburn, John Dudley


Banks, Robert (Harrogate)
Fookes, Dame Janet


Barnes, Mrs Rosie (Greenwich)
Forman, Nigel


Batiste, Spencer
Forsyth, Michael (Stirling)


Beaumont-Dark, Anthony
Fowler, Rt Hon Norman


Bellingham, Henry
Fox, Sir Marcus


Bennett, Nicholas (Pembroke)
Franks, Cecil


Benyon, W.
Freeman, Roger


Biffen, Rt Hon John
Fry, Peter


Blackburn, Dr John G.
Gale, Roger


Body, Sir Richard
Gardiner, George


Bonsor, Sir Nicholas
Garel-Jones, Tristan


Boscawen, Hon Robert
Gill, Christopher


Boswell, Tim
Glyn, Dr Alan


Bottomley, Peter
Goodhart, Sir Philip


Bottomley, Mrs Virginia
Goodlad, Alastair


Bowden, Gerald (Dulwich)
Goodson-Wickes, Dr Charles


Bowis, John
Gow, Ian


Braine, Rt Hon Sir Bernard
Greenway, Harry (Ealing N)


Brandon-Bravo, Martin
Greenway, John (Ryedale)


Brazier, Julian
Gregory, Conal


Bright, Graham
Griffiths, Sir Eldon (Bury St E')


Brown, Michael (Brigg &amp; Cl't's)
Grist, Ian


Browne, John (Winchester)
Ground, Patrick


Bruce, Ian (Dorset South)
Grylls, Michael


Buchanan-Smith, Rt Hon Alick
Gummer, Rt Hon John Selwyn


Buck, Sir Antony
Hague, William


Budgen, Nicholas
Hamilton. Hon Archie (Epsom)


Burns, Simon
Hampson, Dr Keith


Burt, Alistair
Hanley, Jeremy


Butcher, John
Hannam, John


Butterfill, John
Hargreaves, A. (B'ham H'll Gr')


Carlisle, Kenneth (Lincoln)
Hargreaves, Ken (Hyndburn)


Carrington, Matthew
Harris, David


Carttiss, Michael
Hayes, Jerry


Chalker, Rt Hon Mrs Lynda
Hayhoe, Rt Hon Sir Barney


Channon, Rt Hon Paul
Hayward, Robert


Chope, Christopher
Heseltine, Rt Hon Michael


Clark, Hon Alan (Plym'th S'n)
Hill, James


Clark, Sir W. (Croydon S)
Hogg, Hon Douglas (Gr'th'm)


Conway, Derek
Holt, Richard


Coombs, Anthony (Wyre F'rest)
Hordern, Sir Peter


Coombs, Simon (Swindon)
Howarth, Alan (Strat'd-on-A)


Cope, Rt Hon John
Howarth, G. (Cannock &amp; B'wd)


Couchman, James
Howell, Rt Hon David (G'dford)


Cran, James
Howell, Ralph (North Norfolk)


Critchley, Julian
Hughes, Robert G. (Harrow W)


Curry, David
Hunt, David (Wirral W)


Davies, Q. (Stamf'd &amp; Spald'g)
Hunt, John (Ravensbourne)


Davis, David (Boothferry)
Hunter, Andrew


Day, Stephen
Irvine, Michael


Devlin, Tim
Irving, Charles





Jack, Michael
Patnick, Irvine


Jackson, Robert
Patten, Chris (Bath)


Janman, Tim
Patten, John (Oxford W)


Jessel, Toby
Pawsey, James


Johnson Smith, Sir Geoffrey
Peacock, Mrs Elizabeth


Jones, Robert B (Herts W)
Porter, Barry (Wirral S)


Jopling, Rt Hon Michael
Porter, David (Waveney)


Kellett-Bowman, Dame Elaine
Portillo, Michael


Key, Robert
Powell, William (Corby)


King, Roger (B'ham N'thfield)
Price, Sir David


Kirkhope, Timothy
Raffan, Keith


Knapman, Roger
Raison, Rt Hon Timothy


Knight, Greg (Derby North)
Rathbone, Tim


Lamont, Rt Hon Norman
Redwood, John


Lang, Ian
Rhodes James, Robert


Latham, Michael
Riddick, Graham


Lawrence, Ivan
Ridley, Rt Hon Nicholas


Lee, John (Pendle)
Rifkind, Rt Hon Malcolm


Lennox-Boyd, Hon Mark
Rossi, Sir Hugh


Lester, Jim (Broxtowe)
Rost, Peter


Lightbown, David
Rowe, Andrew


Lilley, Peter
Rumbold, Mrs Angela


Lloyd, Sir Ian (Havant)
Ryder, Richard


Lloyd, Peter (Fareham)
Sayeed, Jonathan


Lord, Michael
Scott, Nicholas


Luce, Rt Hon Richard
Shaw, David (Dover)


Lyell, Sir Nicholas
Shaw, Sir Giles (Pudsey)


McCrindle, Robert
Shaw, Sir Michael (Scarb')


Macfarlane, Sir Neil
Shelton, Sir William


MacGregor, Rt Hon John
Shephard, Mrs G. (Norfolk SW


MacKay, Andrew (E Berkshire)
Shepherd, Colin (Hereford)


Maclean, David
Shersby, Michael


McLoughiin, Patrick
Sims, Roger


McNair-Wilson, Sir Michael
Smith, Tim (Beaconsfield)


McNair-Wilson, P. (New Forest)
Speed, Keith


Major, Rt Hon John
Spicer, Sir Jim (Dorset W)


Malins, Humfrey
Spicer, Michael (S Worcs)


Mans, Keith
Squire, Robin


Maples, John
Stanbrook, Ivor


Marshall, Michael (Arundel)
Steen, Anthony


Martin, David (Portsmouth S)
Stern, Michael


Mates, Michael
Stevens, Lewis


Maxwell-Hyslop, Robin
Stewart, Andy (Sherwood)


Mayhew, Rt Hon Sir Patrick
Stewart, Rt Hon Ian (Herts N)


Meyer, Sir Anthony
Stradling Thomas, Sir John


Miller, Sir Hal
Summerson, Hugo


Mills, Iain
Taylor, Ian (Esher)


Mitchell, Andrew (Gedling)
Taylor, John M (Solihull)


Mitchell, Sir David
Thorne, Neil


Moate, Roger
Thurnham, Peter


Montgomery, Sir Fergus
Townsend, Cyril D. (B'heath)


Moore, Rt Hon John
Tredinnick, David


Morris, M (N'hampton S)
Trotter, Neville


Morrison, Sir Charles
Wakeham, Rt Hon John


Morrison, Rt Hon P (Chester)
Walker, Bill (T'side North)


Moynihan, Hon Colin
Ward, John


Neale, Gerrard
Warren, Kenneth


Nelson, Anthony
Wheeler, John


Neubert, Michael
Widdecombe, Ann


Newton, Rt Hon Tony
Wiggin, Jerry


Nicholls, Patrick
Yeo, Tim


Nicholson, David (Taunton)
Young, Sir George (Acton)


Norris, Steve
Younger, Rt Hon George


Onslow, Rt Hon Cranley



Owen, Rt Hon Dr David
Tellers for the Ayes:


Page, Richard
Mr. Sydney Chapman and Mr. Tom Sackville.


Paice, James



NOES


Abbott, Ms Diane
Beckett, Margaret


Adams, Allen (Paisley N)
Beith, A. J.


Allen, Graham
Bell, Stuart


Anderson, Donald
Benn, Rt Hon Tony


Archer, Rt Hon Peter
Bennett, A. F. (D'nt'n &amp; R'dish)


Ashley, Rt Hon Jack
Bermingham, Gerald


Ashton, Joe
Bidwell, Sydney


Banks, Tony (Newham NW)
Blair, Tony


Barnes, Harry (Derbyshire NE)
Boateng, Paul


Barron, Kevin
Bray, Dr Jeremy


Battle, John
Bruce, Malcolm (Gordon)






Buchan, Norman
Kirkhope, Timothy


Buckley, George J.
Lambie, David


Caborn, Richard
Lamond, James


Callaghan, Jim
Leighton, Ron


Campbell, Menzies (Fife NE)
Lestor, Joan (Eccles)


Campbell, Ron (Blyth Valley)
Lewis, Terry


Campbell-Savours, D. N.
Lloyd, Tony (Stretford)


Carlile, Alex (Mont'g)
Lofthouse, Geoffrey


Cartwright, John
Loyden, Eddie


Clark, Dr David (S Shields)
McAllion, John


Clay, Bob
McAvoy, Thomas


Clelland, David
Macdonald, Calum A.


Coleman, Donald
McFall, John


Cook, Robin (Livingston)
McKay, Allen (Barnsley West)


Corbett, Robin
McKelvey, William


Corbyn, Jeremy
McLeish, Henry


Cousins, Jim
Maclennan, Robert


Crowther, Stan
Madden, Max


Cryer, Bob
Mahon, Mrs Alice


Cummings, John
Marek, Dr John


Cunliffe, Lawrence
Marshall, David (Shettleston)


Cunningham, Dr John
Martin, Michael J. (Springburn)


Dalyell, Tam
Martlew, Eric


Davies, Ron (Caerphilly)
Maxton, John


Davis, Terry (B'ham Hodge H'I)
Meacher, Michael


Dixon, Don
Michie, Bill (Sheffield Heeley)


Doran, Frank
Mitchell, Austin (G't Grimsby)


Douglas, Dick
Morgan, Rhodri


Duffy, A. E. P.
Morley, Elliott


Dunwoody, Hon Mrs Gwyneth
Morris, Rt Hon A. (W'shawe)


Eadie, Alexander
Morris, Rt Hon J. (Aberavon)


Evans, John (St Helens N)
Mowlam, Marjorie


Ewing, Harry (Falkirk E)
Mullin, Chris


Fatchett, Derek
Murphy, Paul


Faulds, Andrew
O'Brien, William


Field, Frank (Birkenhead)
O'Neill, Martin


Fisher, Mark
Orme, Rt Hon Stanley


Flannery, Martin
Patchett, Terry


Flynn, Paul
Pendry, Tom


Foot, Rt Hon Michael
Pike, Peter L.


Foster, Derek
Powell, Ray (Ogmore)


Foulkes, George
Prescott, John


Fraser, John
Quin, Ms Joyce


Fyte, Maria
Randall, Stuart


Garrett, Ted (Wallsend)
Redmond, Martin


George, Bruce
Rees, Rt Hon Merlyn


Godman, Dr Norman A.
Reid, Dr John


Gordon, Mildred
Richardson, Jo


Gould, Bryan
Roberts, Allan (Bootle)


Griffiths, Nigel (Edinburgh S)
Robertson, George


Griffiths, Win (Bridgend)
Rogers, Allan


Grocott, Bruce
Rooker, Jeff


Hardy, Peter
Ross, Ernie (Dundee W)


Harman, Ms Harriet
Rowlands, Ted


Hattersley, Rt Hon Roy
Ruddock, Joan


Haynes, Frank
Salmond, Alex


Healey, Rt Hon Denis
Sheerman, Barry


Heffer, Eric S.
Sheldon, Rt Hon Robert


Henderson, Doug
Skinner, Dennis


Hinchliffe, David
Smith, Andrew (Oxford E)


Holland, Stuart
Smith, C. (Isl'ton &amp; F'bury)


Home Robertson, John
Smith, Rt Hon J. (Monk'ds E)


Hood, Jimmy
Smyth, Rev Martin (Belfast S)


Howarth, George (Knowsley N)
Snape, Peter


Howell, Rt Hon D. (S'heath)
Soley, Clive


Howells, Dr. Kim (Pontypridd)
Steinberg, Gerry


Hughes, John (Coventry NE)
Stott, Roger


Hughes, Robert (Aberdeen N)
Taylor, Matthew (Truro)


Hughes, Roy (Newport E)
Thompson, Jack (Wansbeck)


Hughes, Sean (Knowsley S)
Turner, Dennis


Hughes, Simon (Southwark)
Vaz, Keith


Illsley, Eric
Wall, Pat


Janner, Greville
Wallace, James


Jones, Barry (Alyn &amp; Deeside)
Wareing, Robert N.


Jones, Ieuan (Ynys Môn)
Welsh, Michael (Doncaster N)


Jones, Martyn (Clwyd S W)
Williams, Rt Hon Alan


Kaufman, Rt Hon Gerald
Williams, Alan W. (Carm'then)


Kennedy, Charles
Winnick, David





Wise, Mrs Audrey
Tellers for the Noes:


Worthington, Tony
Mrs. Llin Golding and Mr. Ken Eastham.

Question accordingly agreed to.

Amendments made: No. 37, in page 25, line 44, leave out from 'cost' to 'during' in line 45 and insert
`to the supplier of purchasing or generating any electricity supplied by him'.

No. 38, in page 26, line 1, after 'cost,' insert 'to him'.

No. 39, in page 26, line 4, leave out 'the regulations' and insert
'regulations under this section and excluding, in the case of the cost mentioned in paragraph (a) above, any advance payments taken into account under subsection (2A) above'.

No. 40, in page 26, line 14, after 'sufficient', insert
`(after payment of the administrative expenses of the prescribed person)'.

No. 41, in page 26, line 17, at end insert—
'"advance payment" means—

(a) any payment made by the public electricity supplier in pursuance of the qualifying arrangements; and
(b) where he is generating electricity in pursuance of those arrangements, any expense so incurred by him,
which is made or incurred before any electricity is generated in pursuance of those arrangements, and any reference to the making of advance payments shall be construed accordingly;'.

No. 42, in page 26, line 21, leave out
`the order under section 30(1)'
and insert
`an order under section 30'.

No. 43, in page 26, line 25, leave out from 'the' to end of line 26 and insert
'first day appointed by the first order under section 30 above or, if that'.—[Mr. Michael Spicer.]

Clause 32

FUEL STOCKS ETC. AT GENERATING STATIONS

Mr. Michael Spicer: I beg to move amendment No. 44, in page 27, line 26, at end insert—
'(4A) A direction under subsection (2) or (3) above which confers on any person the function of specifying anything failing to be specified under the direction may require that person to exercise that function in such manner as may be specified by the direction.'
This is essentially a technical amendment, designed to provide an additional and necessary element of flexibility to the direction-making powers in the clause. It allows the Secretary of State, when giving directions to the operators of generating stations, to give directions to the National Grid Company also. Clearly, that makes sense. It seemed to us right to underline that in the Bill.

Amendment agreed to.

Clause 33

CONSENT REQUIRED FOR CONSTRUCTION ETC. OF GENERATING STATIONS

The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move amendment No. 45, in page 28, line 1, leave out 'subsection (2)' and insert 'subsections (2) and (2A)'.

Mr. Speaker: With this it will be convenient to consider Government amendments Nos. 48, 46, 97, 99 and 100.

Mr. Lang: We have put down these amendments to clause 33, which provides for consent to be obtained for the construction, extension or operation of generating stations. The proposed amendments will provide a degree of flexibility if, for example, we wish to exclude certain types of station from the consent required should the 50 MW threshold be lowered at any time in the future. The amendments will also enable certain types of works in connection with generating stations, or certain changes in operation, to be exempted from the consent requirement if the Secretary of State considers it more appropriate that they should be dealt with under normal planning procedures.
Amendment No. 46 refers to fees accompanying applications. We have decided that, in future, fees should be payable with such applications. No such power exists under present legislation, and I think that the House would agree that it has long been anomalous that the Department's costs have not been recoverable.
Amendments Nos. 97 and 99 relate to the deeming of the granting of hazardous substances consent. New paragraph (1A) parallels a provision to be inserted into the Town and Country Planning Act 1971 and the Town and Country (Scotland) Act 1972 by part IV of the Housing and Planning Act 1986, which the Government intend to bring in force later this year.
Part IV of the 1986 Act will introduce new controls over hazardous substances. Under the provisions to be introduced by the Act in relation to statutory undertakers, a Minister will be able to deem to be granted hazardous substances consent where a hazardous substance will be present on a development for which his authorisation is required. This does not imply any diminution of scrutiny of any hazardous substance aspect of any application.
The purpose of the amendment is to simplify the procedures for those making applications under clause 33. Not all such applicants will be deemed to be statutory undertakers, and the relevant provision under part IV of the 1986 Act will not, therefore, be applicable in all cases. It is because of this that a free-standing provision in relation to deemed planning permission is already included in paragraph 7(1) of schedule 8. A similar free-standing provision is necessary to enable the Secretary of State to deem hazardous substances consent to be granted, where appropriate, in granting consent under clause 33.
The new paragraph requires the Secretary of State to consult the Health and Safety Commission before deeming a hazardous substances consent to be granted. This requirement is consistent with the parallel provision to be introduced under the Housing and Planning Act 1986.
Amendment No. 100 is a consolidation amendment, which also corrects an error in the original drafting.

Mr. Doran: I wish to raise some minor points of clarification.
As I understand it, amendment No. 48 will give the Secretary of State the power to order that certain power stations of the classes or descriptions that he will specify should not require his special consent. Under the terms of clause 33(2), power stations of under 50 MW generating capacity are already excluded, so I should like clarification of why that power is required. Does the Minister envisage that larger power stations—and if my memory serves me correctly, the 50 MW capacity can already be altered by order—would be excluded if they fell into a particular category?
In relation to amendment No. 97, the Opposition always get nervous when we feel that the Health and Safety Commission is being excluded or is not being given its proper place. Obviously I am conscious that the amendment would require it to be consulted, but in what circumstances would that be, and what change in the existing procedure is envisaged? My understanding is that at present the specific permission of the Health and Safety Commission—not just consultation—is required for the granting of a hazardous substance consent.
May I please have clarification on those two points?

Mr. Eadie: The Minister talked about fees having to be paid. He said that the House would probably be astonished to find that the Department's fees had never been recoverable. I wonder if he could tell us something about the circumstances, and about the sums that are likely to be involved.

Mr. Lang: I shall try to answer the three points that have been put to me.
As I explained in the context of amendment No. 48, we were anxious to have a degree of flexibility—for example, in case we might want to exclude certain types of stations from the consent requirement if we were to reduce the 50 MW threshold at any time in the future. It is also worth mentioning that the amendments would enable generating stations on offshore oil and gas installations which operate for the generators' own use to be exempted from the consent requirement. The hon. Member for Aberdeen, South (Mr. Doran), particularly with his constituency interest, will know that there are special provisions under the Offshore Installations Act which cover offshore platforms, but that is an example of the kind of thing that we might wish to exclude from the provisions here.
The hon. Member is concerned about the implications for the Health and Safety Commission. Let me reassure him that under part IV of the 1986 Act we are tightening up the controls over substances of this kind, such as chlorine, hydrogen and asbestos. The amendments bring the Bill into line with the thinking behind that Act. As I have mentioned, the Secretary of State would be required to consult the Health and Safety Commission before deeming a hazardous substances consent to be granted.
In respect of the point raised by the hon. Member for Midlothian (Mr. Eadie), it is difficult to be precise about the fees. They would tend to relate to the land involved in the application and would, therefore, form a very small proportion of the overall costs of any project in the context of the construction of a generating station. However, I think that the hon. Gentleman will agree that it is in line with our general policy that such costs should be recovered. The provision would bring the situation into line with the arrangements for other planning applications.

Mr. Eadie: I know that the hon. Gentleman has made a statement about fees and costs, but would he care to write to me, when he has had an opportunity to consider the matter, and tell me what the cost is likely to be? Ministers are bound to have some idea.

Mr. Lang: How long is a piece of string? Certainly I will write to the hon. Gentleman—I am keen to be helpful. I am not sure that there is much more that I will be able to say to him, but I shall try to give some hypothetical cases, which I hope will assist.

Amendment agreed to.

Amendment made: No. 48, in page 28, line 13, at end insert
'(2A) The Secretary of State may by order direct that subsection (1) above shall not apply to generating stations of a particular class or description, either generally or for such purposes as may be specified in the order.'.—[Mr. Michael Spicer.]

Schedule 8

CONSENTS UNDER SECTIONS 33 AND 34

Amendments made: No. 46 in page 98, line 37, at end insert—
'(3) Regulations under this paragraph may make provision for determining the fees to be paid on applications for consent under section 33 or 34 of this Act, and the circumstances in which they are to be paid.
(4) Any sums received by the Secretary of State under this paragraph shall be paid into the Consolidated Fund.'.

No. 97, in page 101, line 40, at end insert—
'(lA) On granting a consent under section 33 of this Act in respect of any operation or change of use that would involve the presence of a hazardous substance in circumstances requiring hazardous substances consent, the Secretary of State may, after consultation with the Health and Safety Commission, direct that hazardous substances consent shall be deemed to be granted, subject to such conditions (if any) as may be specified in the direction.'.

No. 99, in page 101, line 42, after 'permission', insert 'or hazardous substances consent'.

No. 100, in page 102, line 7, at end insert—
'(2) In section 149 of the Local Government, Planning and Land Act 1980, each of the following, namely—

(a) subsection (3)(a) (power of Secretary of State to confer on urban development corporation functions of local planning authority in England and Wales); and
(b) subsection (8)(a) (which makes corresponding provision in relation to Scotland),

shall have effect in relation to the provisions of this Schedule (so far as applying to applications for consent under section 34 of this Act) as it has effect in relation to the provisions referred to in that subsection.'.—[Mr. Michael Spicer.]

Schedule 9

PRESERVATION OF AMENITY AND FISHERIES

Mr. Malcolm Bruce: I beg to move amendment No. 118, in page 102, line 10, leave out paragraphs 1 and 2 and insert—

'Code of Practice for Environmental Conservation: England and Wales

1.—(1) The Secretary of State in consultation with the Director General shall by order made by statutory instrument issue a code of practice with respect to the environmental and recreational duties for the purpose of:

(a) requiring, when formulating or considering any relevant proposals, each of the following, namely, any licence holder, any person authorised by an exemption to generate electricity, the Director and the Secretary of State,

(i) to further the conservation of the natural beauty and amenity of the countryside (including its flora and fauna and geological and physiographical features) and of any features of archaelogical interest there;
(ii) to further the protection of buildings, features and other objects of architectural or historic interest; and
(iii) to promote energy conservation.


(b) giving advice to any licence holder, and any person authorised by exemption to generate electricity, with respect to any of the requirements in subsection 1(a) above;
(c) promoting practices that will further the requirements under subsection 1(a) above;

(2) In fulfilling their responsibilities those named in subsection 1 above shall:

(a) take into account any effect the proposals would have on the natural beauty of the countryside or on any such flora, fauna, features, buildings or objects, as described in subsection 1(a) above.

(3) In subsection (1) 'relevant proposals' means:

(a) in relation to any licence holder or any person authorised by an exemption to generate electricity, any proposals, programme or series of proposals:

(i) for the construction, extension or operation of a generating station;
(ii) for the installation of an electric line, whether above or below ground;
(iii) for the execution of any other works for or connection with the generation, transmission or supply of electricity;

(b) in relation to the Director any proposals, programme or series of proposals which arise as a result of his general duties to promote the generation, and efficient use, of electricity;
(c) in relation to the Secretary of State, any proposals for which his consent is required under this Act.

(4) In fulfilling their responsibilities under this section those named in subsection 1 shall consult on any proposals as defined in subsection (3) above with the Countryside Commission, the Nature Conservancy Council, the Historic Buildings and Monuments Commission for England and the Historic Buildings Council for Wales.

(5) The Secretary of State shall prior to issuing an order under this section in consultation with the Director General, take into account the views of the Countryside Commission, The Nature Conservancy Council, the Historic Buildings and Monuments Commission for England and Wales, the Historic Buildings Council for Wales and other persons it is reasonable to expect him to consult.

(6) A person who, contravenes or fails to comply with an order issued under this section shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.

(7) Any person shall be entitled to lay a complaint of breach of any order under this section at any magistrates' court in England and Wales.

(8) This paragraph extends to England and Wales only.

Code of Practice for Environmental Conservation: Scotland

2.—(1) The Secretary of State in consultation with the Scottish Office of the Director General shall by order made by statutory instrument issue a code of practice with respect to environmental and recreational duties in Scotland for the purpose of:

(a) requiring, when formulating or considering any relevant proposals, each of the following, namely, any licence holder, any person authorised by an exemption to generate electricity, the Director and the Secretary of State,

(i) to further the conservation of the natural beauty and amenity of the countryside (including its flora and fauna and geological and physiographical features) and of any features of archaeological interest there;
(ii) to further the protection of buildings, features and other objects of architectural or historic interest;
(iii) to promote energy conservation;
(iv) to, without prejudice to the generality of subsections 2(1)(a)(i) and (ii) above, to avoid causing injury, so far as possible, to fisheries or to the stock of fish in any waters;
(b) giving advice to any licence holder, and any authorised by exemption to generate electricity, with respect to any of the requirements in subsection 1(a) above;


(c) promoting practices that will further the requirements under subsection 1(a) above.

(2) In fulfilling their responsibilities those named in subsection 1 above shall:

(a) take into account any effect the proposals would have on the natural beauty of the countryside or on any such flora, fauna, features, buildings or objects, as described in subsection 1(a) above;

(3) In subsection 1 'relevant proposals' means:

(a) in relation to any licence holder or any person authorised by an exemption to generate electricity, any proposals, programme or series of proposals:

(i) for the construction, extension or operation of a generating station;
(ii) for the installation of an electric line, whether above or below ground;
(iii) for the execution of any other works for or connection with the generation, transmission or supply of electricity;
(b) in relation to the Director any proposals, programme or series of proposals which arise as a result of his general duties to promote the generation, and efficient use, of electricity;
(c) in relation to the Secretary of State, any proposals for which his consent is required for under this Act.

(4) In fulfilling their responsibilities under this section those named in subsection (1) shall consult on any proposals as defined in subsection (3) above with the Countryside Commission for Scotland, the Nature Conservancy Council, the Fisheries Committee, the Historic Buildings Council for Scotland and the Ancient Monuments Board for Scotland.

(5) The Secretary of State shall prior to issuing an order under this section in consultation with the Director General's office in Scotland, take into account the views of the Countryside Commission for Scotland, the Nature Conservancy Council, the Fisheries Committee, the Ancient Monuments Board for Scotland and the Historic Buildings Council for Scotland, and other persons it is reasonable to expect him to consult.

(6) A person who contravenes or fails to comply with an order issued under this section shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.

(7) Any person shall be entitled to seek a finding that there has been a breach of any order under this section by summary application in the sheriff court.

(8) This section applies to Scotland only.'.

Mr. Speaker: With this it will be convenient to take the following: Government amendments Nos. 49, 50 and 90.
Amendment No. 155, in page 103, line 13, after `fisheries', insert `(including fish farms)'.
Amendment No. 156, in page 103, line 17, at end add `after consulting all relevant local authorities and such persons as appear to him to represent the interests of fishermen'.

Mr. Bruce: The thrust behind the amendment is self evident. It replaces the two paragraphs in schedule 9 with a much more strongly worded paragraph to ensure that the environmental commitment in the Bill is beefed up.
Effectively, schedule 9 sets out no more than the obligations imposed on the electricity supply industry in 1957. The Government should be able to do better than that when they are proposing to transfer that industry to the private sector more than 30 years later, especially when they claim to have a much higher commitment to environmental factors. Regrettably, the schedule is extremely weak. It uses phrases such as the industry
shall have regard to the desirability of
environmental factors and
shall take into account any effect
on the countryside. The amendment makes it a requirement on the industry "to further the conservation" of the countryside. The wording is much more positive and

changes a weak, out-of-date statement of mild, good intent to a code of practice that specifically addresses environmental issues, particularly flora, fauna, buildings, fisheries and energy conservation. It takes into account the wider effect of the impact that the industry is now known to have on all aspects of the environment in a variety of radical ways.
The energy supply industry affects the health and welfare of every species on the planet, whether animals, birds, plants or human beings. It also affects buildings. You, Mr. Speaker, more than many may be aware of how much it affects buildings, considering the work done on this building in the past few years, why it cost much more than was originally estimated and why it required a much more radical programme of work than had been anticipated.
I understand that the contractors thought that the restoration of the building involved a cleaning process. I shall leave aside the much vaunted anecdote of the overspent parliamentary Committee of more than 100 years ago which toured the country at great expense looking for suitable stone. Its members may have been stoned more often than they sought stone because they came up with an unsatisfactory building material. The effects of acid rain on the atmosphere created by power stations in the London area led many statutes to fall apart when the contractors set to work on them. That is the sort of consideration that I hope we shall take into account in future. What is the point of cleaning buildings if we do not create the framework by which we prevent deterioration at the same rate in future generations?
The Minister may argue that that is a matter for broader regulations. Indeed, he has argued that it is not something that should be built into the industry's requirements but that the industry should simply respond to regulations imposed by the Government. I must take issue with him on that. The electricity supply industry has far too great an environmental impact not to be charged internally to promote the quality of the environment as a specific part of its brief under the licence which is, after all, issue to it by the director general and the Secretary of State. We should not pass a measure which does not make it absolutely clear that any licence holder who is generating electricity under the terms of the Bill must take specific account of the industry's impact on the environment.
I shall give some examples of the contribution of the electricity supply industry to some of our more significant environmental problems. It emits 233 million tonnes of carbon dioxide a year, accounting for 39 per cent. of the total output of carbon dioxide. That makes it a significant contributor to the greenhouse effect. It is perhaps also worth noting in passing that it does not make so much of a contribution that the replacement of fossil-fuelled power stations with a small number of nuclear power stations will significantly reduce that impact. Nevertheless, it seems reasonable to charge the industry with trying to improve that record.
6.45 pm
Seventy-three per cent. of the sulphur dioxide discharged into the atmosphere comes from the electricity supply industry in the United Kingdom, as does 35 per cent. of the nitrous oxides. The nuclear industry makes a significant contribution to environmental problems because to date we have one and a half teaspoonfuls of high-level, radioactive waste for every man, woman and


child in the country—all directly produced by the electricity supply industry and having significant implications for the environment. That has been stated previously and will no doubt be discussed again.
We have several examples of where the discharges from the industry have an effect on the flora and fauna of certain areas. In particular, in Cumbria, cattle and, if there is any significance in the bits of evidence, the local population are affected. Nobody can suggest that the electricity supply industry does not have a major impact on the environment.
That makes the Government's twin-track position on their legislation strange. This Bill and the Water Bill are going through the House simultaneously and both are recognised to have significant importance to the environment. The Government have tried to turn the attack on the Water Bill into a defence as they have argued that they will use the legislation to promote environmental improvements. In addition, they have attached a substantial environmental schedule to the Bill. It seems strange that Ministers in one Department should recognise that one Bill requires a major environmental provision built into it while Ministers in a different Department argue that there is no such necessity, particularly as many environmental groups agree with me that the impact of the electricity supply industry on the environment is greater than that of the water industry. The requirement for stringent environmental controls and action to promote environmental improvements is probably greater for the electricity supply industry than the water industry. It seems extraordinary that the Government are taking such an opposing view on this legislation compared with the Water Bill.
If the amendment were adopted, electricity supply companies would almost certainly appoint a director with specific responsibility for promoting the environment. The Minister may say, "The companies may in any case do that of their own volition", and they may. Unless they have a specific statutory responsibility to promote environmental protection and improvements, that will be purely fortuitous. It is certainly unlikely to be a pattern followed by every company, if indeed it is followed by any.
It is worth suggesting that the companies appoint such a director. The oil companies do. I know that Shell and British Petroleum have board directors with specific responsibility for the environment because they recognise the substantial environmental impact of the activities in which they are engaged.
I acknowledge that the responsibility under this provision should apply to all types of electricity generation. Although I am sceptical that the legislation will achieve it, I hope that there will be an increase in the generation of electricity through new, renewable alternative sources. If that is the case, as the Minister is fond of telling us, that will have an environmental impact. It is a favoured expression of the Minister that there is no form of generating electricity that does not have an environmental impact. It is perhaps a matter of judgment as to how great any intrusive environmental impact is, but I am prepared for the purposes of this debate to acknowledge what the Minister has said.
If over the next few years we have a significant increase in the number of proposals for electricity generation by

tidal or wave power, that will have clear implications for our estuaries, our fisheries and, indeed, for the visual amenity of certain areas around our coasts. It could have implications for tourism and recreation, such as sailing and other water sports. I do not dispute that some of the benefits may be positive ones. That, again, is a matter of judgment. It is important to ensure, however, that, if the industry moves into those areas, it has a responsibility to ensure that it takes fully into account the environmental impacts and, indeed, produces environmental impact studies for such significant proposals.

Mr. Hardy: One smaller aspect of the matter that the hon. Gentleman may wish to consider is that the public sector electricity organisations have been most helpful and have frequently been good neighbours of the conservation movement. In Yorkshire, the board has been extremely supportive of the Yorkshire Wildlife Trust. I believe that that sort of comment could be generally applied. There is some anxiety that, when the industry becomes privately owned, it may not take such a helpful or good neighbourly view as has been displayed by the CEGB and number of the area boards.

Mr. Bruce: I am grateful to the hon. Gentleman for his intervention, because he made an important point which I believe reinforces the purpose of my amendment. What is slightly worrying is that, in a sense, the Bill as it stands almost weakens the existing provisions for the industry. The hon. Gentleman has rightly said that the industry has over time started to do things over and above what is required of it and has built up a relationship with the conservation bodies. It would seem a wrong signal to go out from the House at this time to suggest that, at the very time when we are transferring the ownership to new generating companies—new licensees—that we should at the same time say that, if anything, the environmental restraints on those new companies are no greater, and may be marginally weaker, than has been the case since 1957. We are entitled to suggest that now is the time to build in all the existing best practice and make that the starting point of the environmental restraints that should be applied to the new licensees.
I make it clear that that is not what my amendment says. I am suggesting that that is what could be the result of the amendment if the provision for requiring a code of practice to be drawn up were written into the schedule. All that my amendment suggests is that there should be a code of practice. The Government's schedule, unamended, pretty well restates a rather weak, general statement of good intent without any real statutory force and without any requirement positively to promote environmental considerations. The intervention of the hon. Member for Wentworth (Mr. Hardy) was pertinent and reinforces my point.
In Committee we had a number of debates relating to the environmental impact of the industry on a smaller scale. We discussed, for example, the problem of overhead power lines. I believe that those should be taken into account in a number of different ways. We have perhaps over the past 30 or 40 years become slightly inured to the march of pylons across the countryside. They are very intrusive, and sometimes the line that is taken—partly because there may be no other option, but partly because it may be an easier and cheaper line—is especially intrusive. In certain parts of the country nobody can deny


that pylons have substantially spoiled the outlook and the amenity. Nobody could suggest that at this juncture we should suddenly say, "Right, under the new regime all power lines should be buried", but we should be raising the issue that it is desirable to bury them where appropriate and that it is desirable to consider even more strenuously routing them in a way that would minimise their impact. If we do not take a stand on this matter, the signal may be given that we are not changing the standards but are relaxing them.

Mr. Bill Walker: Surely the hon. Gentleman is not seriously suggesting that in the Highlands of Scotland it would be practical, economical or wise to consider that one should continue to supply the remote hamlets and homes in any way other than with overhead lines. The alternative would prohibit that from happening.

Mr. Bruce: The hon. Gentleman's intervention was perhaps superfluous, because I made it clear that I was not suggesting that we should do away with pylons. I was suggesting that we should look still more sensitively at their routing and their degree of intrusion, and, where appropriate, we should consider the possibility of burial. Even in the Highlands of Scotland, there are areas where in the most sensitive parts it may be appropriate—for example, where they are over the skyline and in the communities—to find a way of burying them. In my home village of Torphins there is a positive cat's cradle of overhead power lines right through the village, which I question to some extent on safety grounds, never mind on the grounds of visual amenity. They certainly spoil the outlook.
To be fair, we deal with this problem far better than they do in America, where the general visual effect of their power lines is much more intrusive than ours. However, there is no doubt that there is considerable scope for more sensitive routing, more visual sensitivity about the location of overhead lines and for considering burying some of the existing lines, especially in the most sensitive areas.
I am outlining the kind of things that should and could be dealt with in a code of practice such as is required by my amendment. No such code of practice is proposed by the Government, who have effectively said that it is not a matter for the Bill, as it is not an environment Bill and there is no requirement for building in environmental restraints. I would take issue fundamentally with the Minister. I do not deny that the Government have an additional responsibility to provide the regulatory framework and the environmental controls on a general basis with which all industry, and, indeed, all organisations that have a physical impact on the environment, should have to conform. I hope that over the next few years the Government will introduce a series of measures designed to do just that.
I believe that the Government are fundamentally wrong if they do not recognise that, unless they are built into the obligations of the companies at the outset, the environmental standards that are promoted will inevitably be weaker. Companies will be required to conform to external regulations only as and when they are introduced. My amendment seeks to provide that we should say to the directors, the shareholders and the management of the new companies who will operate under the licence of the Bill, "You must know from the first day on which you take up

your responsibility that you are charged with a positive duty to promote environmental improvement. You must. first, consider everything that you are doing in terms of its environmental impact and minimise that impact and, secondly, review all the assets that you have in place and see whether you can find ways of reducing the impact".
There is no doubt that people are not simply looking for no greater despoliation in future. If that is all the Government are offering them, that is a fairly restricted way of tackling the environmental problems about which the Government claim to be concerned. What people want is action to repair some of the damage done in the past. No one can deny that the electricity supply industry has made a significant contribution to damage to the environment—by its very nature it is an intrusive industry. We need a better code of practice for the future in order to repair some of the damage. Therefore, this amendment is necessary and desirable.
7 pm
We intend to make sure that as the Bill passes through the House the Government are made aware of pressures from outside and from the Opposition. When they talk about the environment, we intend to try to ensure that that is translated into action. So far they have resisted every attempt to convert the Bill into one that will promote positive environmental improvement. For that reason, it is a retrograde step and I remain unconvinced by the Government's arguments, even at this stage. I hope that they will recognise that my amendment is a way of giving the Bill a genuine green tinge and that they will therefore accept it.

Mr. Hardy: I merely want to endorse the call for a code of practice which the hon. Member for Gordon (Mr. Bruce) has proposed.
Although I recognise that damage has been done to the environment, there have been pluses to which I referred during my intervention in the hon. Gentleman's speech. However, one is fearful about the prospect of that sort of attitude being maintained. I am deeply worried about that, not least because of the intervention by the hon. Member for Tayside North (Mr. Walker). He seemed to suggest that those of us who are anxious about pylons may be seeking to bury all existing transmission lines, but that is not so. I endorse the reply that the hon. Member for Gordon made. He may recall that I tabled a similar amendment in Committee, which was not accepted. I am not at all optimistic that the Government will accept this amendment.
There is a difference between the present situation and that which will follow privatisation. The British people may say that we must consider the public interest and that we should not do this, that or the other. Once privatised, a substantial proportion of the electricity industry will be owned by those seeking to make profits from their homes in foreign parts—Japan, California, West Germany or wherever. Why should they make a profit from the despoliation of our environment? That argument could be used to counter chauvinism and it would also ensure that there was a code of practice. The amendment is commendable.
If the amendment is not carried I hope that the less-disciplined and more-sensitive members of the other place will insist on a code of practice before the Bill reaches the statute book.

Mr. Ieuan Wyn Jones (Ynys Môn): We are debating an important series of amendments to an important part of the Bill. As time goes on we are becoming more conscious of the relationship between industry and the environment. It astounds me to compare the kind of commitment to consider the environment contained in the Bill with the positive impact which would be derived from the imposition of a code of practice.
Currently we are hearing much about commitment to green issues. In fact, the Prime Minister and her Cabinet colleagues now believe that green issues will be the dominant ones in the future. At the weekend some people even suggested that if the Government are to succeed for a fourth term green issues will come to the forefront of politics. Yet the lip service paid by the Government to the environment in this Bill suggests all talk and no action.
Let us look at the words included in schedule 9 as it presently stands:
shall have regard to the desirability of … shall take into account any effect which the proposals would have".
Those words are totally meaningless. Unless there is a positive code of practice obliging the industry to look upon environmental issues positively it will get off lightly.
Although general issues are involved, I should like to deal with a specific interest of great concern to me—the nuclear power station in my constituency and its environmental impact. The decommissioning of that nuclear power station and whether there will be a replacement have been discussed on another occasion. We are unaware of the full environmental impact of decommissioning a nuclear power station. A few days ago there was an announcement about the decommissioning of an existing nuclear power station. The industry must be made aware of the concern of my constituents and people in other parts of the United Kingdom about this matter.
We are now supposed to be in the green age, or should I say a greener age, because a lot of us have been green for a long time. Some people have taken this issue on board recently. I accept that I am green in more than one way.
The amendment can also be recommended because it gives a firm commitment and promise that a code of practice would deal with energy conservation. Energy conservation is central to our argument against the Bill. Unless industry understands that there is merit in energy conservation, our country will continue to waste energy. I know what I am talking about because, as a son of a minister of religion, for many years I lived in large rambling manses with doors which did not fit and windows which let in draughts day and night. I know what is meant by the lack of a proper energy conservation policy because I suffered from it in my early days. I am sure that we have moved on a great deal since those days. The Minister will no doubt point out that these days building regulations do not allow that to happen. I am sure that he is right, but I regularly visit a number of properties that are energy inefficient and unless there is a positive commitment to energy conservation in a code of practice there will be no improvement.
We should be telling people that there are simple ways in which they can be energy efficient. I am sure that many of our existing electrical appliances are inefficient. When people are considering buying a new electrical appliance they should be persuaded to buy the one that is the most energy efficient. I accept, as the hon. Member for Gordon (Mr Bruce) has said, that the code of practice is not written on tablets of stone. The Government must consider ways

to deal with conflicting demands. I accept that greater thought must be given to this matter, but it is one on which we should put greater store. I urge the Government to accept the amendment.

Mr. John Maxton: I shall be brief in supporting the amendment and mention amendments Nos. 155 and 156 which relate to fishing and which, although minor, raise a couple of important points. First, when talking about fisheries, we should include fish farms. The way that a power station operates may affect a fish farm and it is not clear in schedule 9 whether fish farms are included. I hope that the Minister will make it clear. Before the Secretary of State for Scotland appoints the members of the fisheries committee he should consult the professional, commercial fishermen in the industry and fishermen's associations to ensure that the organisation truly represents them.
One reason why we shall support the amendment involves fisheries. Schedule 9 and the fisheries committee relate only to water—to hydro power and other forms of water power stations. I do not understand why that should be so. Nuclear stations are often—certainly Hunterston on the Clyde and Dounreay in Caithness are—placed beside water and may have an impact on fishing.

Mr. Ieuan Wyn Jones: They are all next to water.

Mr. Maxton: Such stations may affect fishing but the fisheries committee does not cover nuclear power stations, only hydro stations.
I say to the hon. Member for Tayside, North (Mr. Walker) that a major stretch of pylons—not in his constituency—will be replaced over the next couple of years. That is—he will well know the word from Committee—the interconnector between Scotland and England, which will be upgraded right the way through to the southern uplands of Scotland. Much of it is, at present, scenically intrusive, as anyone who drives along the A74 will know.
I assume that the replacement, which will mean taking down the present pylons and replacing them with better power lines, will take better account of the scenic desirability and environmental suitability of their position so that they do not intrude on the environment—even if they are not placed underground, although, in some cases we should prefer them to go underground. I hope that we shall receive such a commitment.
I once took my family to Aviemore for a short holiday. We set off to see Urquhart castle on Loch Ness, from where one is supposed to see the Loch Ness monster. Unfortunately, travelling out from Inverness I took the wrong road and went down the wrong side of the loch. We eventually turned off the main road and finished at one of the ugliest little pieces of industrial dereliction that I have ever seen. I never worked out what the place was—there was a lot of waste metal, derelict buildings and overgrown weeds. About a month ago I was taken back to that place by the chairman of the North of Scotland Hydro-Electric Board to see the Foyers generating station.
The point made by my hon. Friend the Member for Wentworth (Mr. Hardy) is important in this context. The environmental improvement carried out by the North of Scotland Hydro-Electric Board at Foyers power station was something of which the board should be proud. It had renovated the old buildings, which are now protected and a fish farm was being run there. As far as it could be, the


place was attractive. My hon. Friend the Member for Wentworth quite rightly said that that is what a public organisation can do. A private company will not have the same concern for the environment as a public board.
The hon. Member for Gordon (Mr. Bruce) rightly dealt at length with how various aspects of the environment will be affected—not merely by pollution, although that is important. Other aspects affected include the scenery and the fishing stocks of particular waters. In Scotland, the scenery is not merely nice to enjoy, but is a major tourist attraction. If we despoil it, we could destroy our tourist industry. Like the hon. Member for Gordon, I believe that schedule 9 is not strong enough. If the Government—or, as the Friends of the Earth recently described them, the "bags", which is an unfair description of the Prime Minister but stands for "born-again greens"—are seriously committed to the environment they should consider accepting the amendment. If not, they should at least introduce other amendments in the other place to make the Bill much stronger.

Mr. Michael Spicer: The Government believe that amendment No. 155, which extends the fisheries provision to fish farms, may be valid. We shall consider introducing measures to that end in the other place. The hon. Member for Glasgow, Cathcart (Mr. Maxton) has caught a fish. Perhaps he did not expect to; he looks surprised. However, we think that the hon. Gentleman has a point and we shall certainly consider it.
The Government entirely agree with the hon. Member for Gordon (Mr. Bruce) who moved amendment No. 118. Some of the arguments in this debate will be circular. We agree about the importance of environmental considerations. Furthermore, we agree that the amenity obligation in schedule 9 can be further extended.
The purpose of the Government's amendments is to do precisely that. We have already ensured, within the terms of the Bill, something which was not there before, which is that the terms of the schedule should apply to private undertakings as well as to public utilities. We shall further extend it to ensure that it includes exempted suppliers, for instance people generating for their own use and various small generators.
However, we must take issue with the general proposition that the hon. Member for Gordon places before the House—that a code of practice should be included in the Bill. We do so for several reasons, to some of which the hon. Gentleman has already alluded. It is true that, under the Bill, the regulator already has a duty to promote energy efficiency. That is a substantial point of development. The Opposition have sneered at it from time to time, but this is the first time that such duties have been set out in a Bill.
We argue strongly that opening the industry to new forms of energy production and new players will ensure a more efficient use of energy. It will make sense in terms of the commercial decisions taken and the type of investment brought forward.
Above all, as the hon. Member for Gordon recognised, the Government believe that a panoply of regulations surround the industry, some of which are extremely tough. Several mentions have been made by us and others to

sulphur dioxide emissions, the restrictions which those will impose on industry and the necessity for the industry to reduce such emissions by 60 per cent. by the year 2003.
The regulations are real and the industry will have to gear itself up to comply with them. There are signs that that message is sinking in fast in the industry. Some of the recent pronouncements of the chairman-designate of PowerGen, Mr. Malpas, clearly show that there is a new recognition of the industry's need to comply with the regulations and to bring in innovations to do so. The hon. Member for Gordon referred to the directors who are responsible for these matters and their concern about the environment; such concern may well spread in response to the need by companies to comply with the regulations.
By way of an example, the hon. Gentleman mentioned the need to reduce carbon dioxide emissions. Given the state of technology and the fact that our industry is so dependent on coal for producing electricity, there is a limit to what can be done directly about these emissions. Of course, we all want a breakthrough—one thinks of the application of the technologies at Grimethorpe, for instance. Opposition Members do not agree that nuclear power and other forms of non-fossil power fit well into a programme of cutting back on CO2 emissions. We are surprised that the hon. Member for Gordon advances his code of practice, for which there are perfectly respectable arguments, and specifies the need to control CO2 emissions at the same time as fervently opposing our proposals for the nuclear industry. I am sure he accepts what we are doing about renewables, but renewables technology is new.
I could go on at great length about what we are doing outside the scope of the Bill with the development of impact studies, and so on. In Committee, I said that even generating stations with a capacity of less than 300 MW might have to have environmental impact studies done on them. There is already a mass of regulations; the only point in dispute is our contention that this is not the Bill in which to introduce such measures. We must ensure—we have ensured—that the electricity industry after privatisation complies with these increasingly tough environmental regulations——

Mr. James Wallace: Perhaps the hon. Gentleman is aware that a code of environmental practice has been considered necessary in the water industry legislation. Will he provide us with an insight into why it is necessary in that legislation but not in this?

Mr. Spicer: Water is integral to the environment. Of course, electricity has an impact on it, but, unlike water, it is not part of the environment as it is usually defined. It is perfectly rational to include environmental considerations in the water measure, which, after all, is largely to do with improving the environment and increasing regulations. The regulations that affect electricity, and other industries, are growing in number. The Bill ensures that the industry meets the requirements of the regulations, which is why I hope that the hon. Member for Gordon will feel able to withdraw his amendment. We have had these arguments before, and he may well remain firm in his view, as we shall in ours.

Mr. Malcolm Bruce: The Minister is probably anticipating the inevitable. His reply was unsatisfactory in a number of ways. He said that the scope of the schedule was being extended to include additional people. I do not


deny that, but my amendment relates more to the coverage than to the scope of the schedule. The Minister is doing nothing to increase the positive requirements to take appropriate action. 
Secondly, the Minister drew a rather lame distinction between the electricity supply industry and the water industry and their respective environmental impacts. I suggest that the Government start to consider including in Bills, in much the same way as they include money resolutions, a statement of their environmental implications. That would ensure that a significant statement was attached to this Bill. It is extraordinary that the Government resist a schedule that merely includes a code of practice with the positive requirement to promote and improve the environment. The Government have produced their own code of practice for the benefit of the Committee that is scrutinising the Water Bill. If they want to convince anyone that they are genuinely committed to the environment, they must recognise that environmental responsibility must be integral to the functioning of an industry such as the electricity industry which has a strong impact on the environment. 
The Minister discussed the environmental impact of the greenhouse effect and CO2. I do not intend to pursue that argument, except to say that a code of practice can deal with all these matters. It can determine what the balance of priorities should be, and the relative impacts of alternative and established technologies. It can determine the balance between the output from fossil-fuel power stations and the possibility of switching to the use of more gas or nuclear power stations. Nothing in my amendment charges the industry with a preconceived mix. It merely says that there should be a code of practice. 
I am convinced that the Government have utterly failed to recognise this Bill's importance as an environmental measure. Their refusal to accept this amendment shows that they are prepared to go ahead and unleash an industry that has a massive impact on the environment without imposing adequate constraints on the private sector. I shall certainly divide the House on the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 159, Noes 256.

Division No. 149]
[7.27 pm


AYES


Abbott, Ms Diane
Buchan, Norman


Adams, Allen (Paisley N)
Callaghan, Jim


Alton, David
Campbell, Ron (Blyth Valley)


Anderson, Donald
Campbell-Savours, D. N.


Archer, Rt Hon Peter
Carlile, Alex (Mont'g)


Armstrong, Hilary
Cartwright, John


Ashley, Rt Hon Jack
Clark, Dr David (S Shields)


Ashton, Joe
Clarke, Tom (Monklands W)


Banks, Tony (Newham NW)
Clay, Bob


Barnes, Harry (Derbyshire NE)
Clelland, David


Barron, Kevin
Coleman, Donald


Battle, John
Cook, Robin (Livingston)


Beckett, Margaret
Corbett, Robin


Beith, A. J.
Cox, Tom


Bell, Stuart
Crowther, Stan


Benn, Rt Hon Tony
Cryer, Bob


Bennett, A. F. (D'nt'n &amp; R'dish)
Cummings, John


Bermingham, Gerald
Cunliffe, Lawrence


Bidwell, Sydney
Davies, Ron (Caerphilly)


Blair, Tony
Davis, Terry (B'ham Hodge H'I)


Bray, Dr Jeremy
Dixon, Don


Brown, Ron (Edinburgh Leith)
Doran, Frank


Bruce, Malcolm (Gordon)
Douglas, Dick





Duffy, A. E. P.
Marshall, David (Shettleston)


Dunwoody, Hon Mrs Gwyneth
Martin, Michael J. (Springburn)


Eastham, Ken
Martlew, Eric


Evans, John (St Helens N)
Maxton, John


Fatchett, Derek
Meale, Alan


Faulds, Andrew
Michie, Bill (Sheffield Heeley)


Fields, Terry (L'pool B G'n)
Morgan, Rhodri


Fisher, Mark
Morley, Elliott


Flannery, Martin
Morris, Rt Hon J. (Aberavon)


Flynn, Paul
Mowlam, Marjorie


Foot, Rt Hon Michael
Murphy, Paul


Foulkes, George
O'Brien, William


Fraser, John
O'Neill, Martin


Garrett, Ted (Wallsend)
Orme, Rt Hon Stanley


George, Bruce
Patchett, Terry


Godman, Dr Norman A.
Pike, Peter L.


Golding, Mrs Llin
Powell, Ray (Ogmore)


Gordon, Mildred
Quin, Ms Joyce


Griffiths, Nigel (Edinburgh S)
Radice, Giles


Griffiths, Win (Bridgend)
Randall, Stuart


Hardy, Peter
Reid, Dr John


Harman, Ms Harriet
Richardson, Jo


Haynes, Frank
Roberts, Allan (Bootle)


Heffer, Eric S.
Robertson, George


Henderson, Doug
Robinson, Geoffrey


Hinchliffe, David
Rogers, Allan


Home Robertson, John
Rooker, Jeff


Howarth, George (Knowsley N)
Ross, Ernie (Dundee W)


Howell, Rt Hon D. (S'heath)
Rowlands, Ted


Howells, Dr. Kim (Pontypridd)
Ruddock, Joan


Hughes, John (Coventry NE)
Salmond, Alex


Hughes, Roy (Newport E)
Sedgemore, Brian


Hughes, Sean (Knowsley S)
Sheerman, Barry


Hughes, Simon (Southwark)
Sheldon, Rt Hon Robert


Illsley, Eric
Skinner, Dennis


Janner, Greville
Smith, Andrew (Oxford E)


Jones, Barry (Alyn &amp; Deeside)
Smith, C. (Isl'ton &amp; F'bury)


Jones, Ieuan (Ynys Môn)
Smith, Rt Hon J. (Monk'ds E)


Jones, Martyn (Clwyd S W)
Snape, Peter


Kaufman, Rt Hon Gerald
Soley, Clive


Kennedy, Charles
Steinberg, Gerry


Kirkwood, Archy
Stott, Roger


Lambie, David
Taylor, Matthew (Truro)


Lamond, James
Thompson, Jack (Wansbeck)


Leighton, Ron
Turner, Dennis


Lestor, Joan (Eccles)
Vaz, Keith


Lewis, Terry
Wall, Pat


Lloyd, Tony (Stretford)
Wareing, Robert N.


Lofthouse, Geoffrey
Welsh, Michael (Doncaster N)


Loyden, Eddie
Williams, Rt Hon Alan


McAllion, John
Williams, Alan W. (Carm'then)


McAvoy, Thomas
Winnick, David


Macdonald, Calum A.
Wise, Mrs Audrey


McFall, John
Worthington, Tony


McKay, Allen (Barnsley West)



Maclennan, Robert
Tellers for the Ayes:


McWilliam, John
Mr. James Wallace and Mr. Menzies Campbell.


Madden, Max



Marek, Dr John



NOES


Adley, Robert
Bellingham, Henry


Alexander, Richard
Bendall, Vivian


Alison, Rt Hon Michael
Bennett, Nicholas (Pembroke)


Allason, Rupert
Benyon, W.


Amery, Rt Hon Julian
Blackburn, Dr John G.


Amess, David
Body, Sir Richard


Amos, Alan
Bonsor, Sir Nicholas


Arbuthnot, James
Boscawen, Hon Robert


Arnold, Jacques (Gravesham)
Boswell, Tim


Ashby, David
Bottomley, Peter


Aspinwall, Jack
Bowden, Gerald (Dulwich)


Atkins, Robert
Bowis, John


Atkinson, David
Braine, Rt Hon Sir Bernard


Baker, Rt Hon K. (Mole Valley)
Brandon-Bravo, Martin


Baker, Nicholas (Dorset N)
Brazier, Julian


Baldry, Tony
Bright, Graham


Banks, Robert (Harrogate)
Brooke, Rt Hon Peter


Batiste, Spencer
Brown, Michael (Brigg &amp; Cl't's)


Beaumont-Dark, Anthony
Browne, John (Winchester)






Bruce, Ian (Dorset South)
Howard, Michael


Buchanan-Smith, Rt Hon Alick
Howarth, Alan (Strat'd-on-A)


Buck, Sir Antony
Howarth, G. (Cannock &amp; B'wd)


Budgen, Nicholas
Howell, Rt Hon David (G'dford)


Burns, Simon
Howell, Ralph (North Norfolk)


Burt, Alistair
Hughes, Robert G. (Harrow W)


Butcher, John
Hunt, David (Wirral W)


Butterfill, John
Hunt, John (Ravensbourne)


Carlisle, Kenneth (Lincoln)
Hunter, Andrew


Carrington, Matthew
Hurd, Rt Hon Douglas


Carttiss, Michael
Irvine, Michael


Channon, Rt Hon Paul
Irving, Charles


Chapman, Sydney
Jack, Michael


Chope, Christopher
Jackson, Robert


Clark, Sir W. (Croydon S)
Janman, Tim


Colvin, Michael
Jessel, Toby


Conway, Derek
Johnson Smith, Sir Geoffrey


Coombs, Anthony (Wyre F'rest)
Jones, Robert B (Herts W)


Coombs, Simon (Swindon)
Jopling, Rt Hon Michael


Cope, Rt Hon John
Kellett-Bowman, Dame Elaine


Couchman, James
Key, Robert


Curry, David
King, Roger (B'ham N'thfield)


Davies, Q. (Stamf'd &amp; Spald'g)
Kirkhope, Timothy


Davis, David (Boothferry)
Knapman, Roger


Day, Stephen
Lamont, Rt Hon Norman


Dicks, Terry
Lang, Ian


Dorrell, Stephen
Latham, Michael


Douglas-Hamilton, Lord James
Lawrence, Ivan


Dover, Den
Lee, John (Pendle)


Dunn, Bob
Lennox-Boyd, Hon Mark


Eggar, Tim
Lightbown, David


Evennett, David
Lloyd, Sir Ian (Havant)


Fairbairn, Sir Nicholas
Lloyd, Peter (Fareham)


Fallon, Michael
Lord, Michael


Favell, Tony
Lyell, Sir Nicholas


Field, Barry (Isle of Wight)
McCrindle, Robert


Finsberg, Sir Geoffrey
Macfarlane, Sir Neil


Fishburn, John Dudley
MacGregor, Rt Hon John


Fookes, Dame Janet
MacKay, Andrew (E Berkshire)


Forman, Nigel
Maclean, David


Forsyth, Michael (Stirling)
McLoughlin, Patrick


Fox, Sir Marcus
McNair-Wilson, Sir Michael


Franks, Cecil
McNair-Wilson, P. (New Forest)


Freeman, Roger
Malins, Humfrey


Fry, Peter
Mans, Keith


Gale, Roger
Maples, John


Gardiner, George
Marshall, Michael (Arundel)


Garel-Jones, Tristan
Martin, David (Portsmouth S)


Gill, Christopher
Mates, Michael


Glyn, Dr Alan
Maxwell-Hyslop, Robin


Goodhart, Sir Philip
Mayhew, Rt Hon Sir Patrick


Goodlad, Alastair
Meyer, Sir Anthony


Goodson-Wickes, Dr Charles
Miller. Sir Hal


Gorman, Mrs Teresa
Mills, Iain


Gow, Ian
Mitchell, Andrew (Gedling)


Greenway. Harry (Ealing N)
Mitchell, Sir David


Greenway, John (Ryedale)
Moate, Roger


Gregory, Conal
Montgomery, Sir Fergus


Griffiths, Sir Eldon (Bury St E')
Morris, M (N'hampton S)


Grist, Ian
Morrison, Str Charles


Ground, Patrick
Morrison, Rt Hon P (Chester)


Grylls, Michael
Moss, Malcolm


Hague, William
Moynihan, Hon Colin


Hamilton, Hon Archie (Epsom)
Neale, Gerrard


Hamilton, Neil (Tatton)
Nelson, Anthony


Hampson, Dr Keith
Neubert, Michael


Hanley, Jeremy
Newton, Rt Hon Tony


Hannam, John
Nicholls, Patrick


Hargreaves, A. (B'ham H'Il Gr')
Nicholson, David (Taunton)


Hargreaves, Ken (Hyndburn)
Nicholson, Emma (Devon West)


Harris, David
Norris, Steve


Hayes, Jerry
Onslow, Rt Hon Cranley


Hayward, Robert
Oppenheim, Phillip


Heathcoat-Amory, David
Page, Richard


Heddle, John
Paice, James


Heseltine, Rt Hon Michael
Patnick, Irvine


Higgins, Rt Hon Terence L.
Patten, Chris (Bath)


Hill, James
Patten, John (Oxford W)


Hogg, Hon Douglas (Gr'th'm)
Pawsey, James


Hordern, Sir Peter
Peacock, Mrs Elizabeth





Porter, Barry (Wirral S)
Spicer, Michael (S Worcs)


Porter, David (Waveney)
Squire, Robin


Portillo, Michael
Stanbrook, Ivor


Powell, William (Corby)
Steen, Anthony


Price, Sir David
Stern, Michael


Raffan, Keith
Stevens, Lewis


Raison, Rt Hon Timothy
Stewart, Andy (Sherwood)


Rathbone, Tim
Stradling Thomas, Sir John


Redwood, John
Summerson, Hugo


Rhodes James, Robert
Taylor, Ian (Esher)


Riddick, Graham
Taylor, John M (Solihull)


Ridley, Rt Hon Nicholas
Tebbit, Rt Hon Norman


Rifkind, Rt Hon Malcolm
Thatcher, Rt Hon Margaret


Roberts, Wyn (Conwy)
Thorne, Neil


Rossi, Sir Hugh
Thurnham, Peter


Rost, Peter
Townsend, Cyril D. (B'heath)


Rowe, Andrew
Tredinnick, David


Rumbold, Mrs Angela
Trotter, Neville


Ryder, Richard
Waddington, Rt Hon David


Scott, Nicholas
Wakeham, Rt Hon John


Shaw, David (Dover)
Walker, Bill (T'side North)


Shaw, Sir Giles (Pudsey)
Watts, John


Shaw, Sir Michael (Scarb')
Wheeler, John


Shelton, Sir William
Widdecombe, Ann


Shephard, Mrs G. (Norfolk SW)
Yeo, Tim


Shepherd, Colin (Hereford)
Young, Sir George (Acton)


Shersby, Michael
Younger, Rt Hon George


Smith, Sir Dudley (Warwick)



Smith, Tim (Beaconsfield)
Tellers for the Noes:


Speed, Keith
Mr. Tony Durant and Mr. Tom Sackville.


Spicer, Sir Jim (Dorset W)

Question accordingly negatived.

Amendments made: No. 49, in page 102, line 13, after 'generate', insert 'or supply'.

No. 50, in page 102, line 23, after 'generate', insert 'or supply'.

No. 90, in page 102, line 38, after 'generate', insert 'or supply'.—[Mr. Lang.]

Clause 38

INFORMATION WITH RESPECT TO LEVELS OF PERFORMANCE

Amendments made: No. 51, in page 31, line 1, leave out 'from time to time' and insert
'at least once in every year'.
No. 52, in page 31, line 5, leave out 'such' and insert 'public electricity'.—[Mr. Lang.]

Clause 40

FIXING OF MAXIMUM CHARGES FOR RESELLING ELECTRICITY

Mr. Malcolm Bruce: I beg to move amendment No. 111, in page 32, line 35, leave out 'maximum prices' and insert 'a maximum price'.

Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take the following amendments: No. 112, in page 32, line 39, leave out subsection (3). 
No. 113, in page 32, line 46, at end, insert—
'(4) Nothing in this section shall be used by private or other landlords to enable a profit to be made from reselling electricity to tenants.'.

Mr. Bruce: I shall speak only briefly because this matter was raised in Committee. We feel that the issue is worth raising again at this stage to see whether the Government are prepared to acknowledge the nature of the problem. The purpose of these amendments is to prevent landlords


from making a profit out of the resale of electricity. In Committee, I said that the agreement between the landlord and tenant relates to rent, and that it is wrong that people who are given a rent that they accept as the basis on which they are to pay then have to pay a high rate for electricity as a means of the landlord supplementing the rent that he charges. This applies to a variety of accommodation, but particularly to furnished accommodation on both short and long-term lets and to holiday homes. I make no distinction; in all cases, the resale of electricity at a profit is a means of getting additional revenue from tenants, and we wish to prevent that.
In Committee, the Government raised practical objections to our proposal, saying that it was difficult to determine what was profit as opposed to genuine cost. The amendments make clear our intention to ensure that if a landlord incurs costs associated with the provision of electricity over and above the straight cost that he is paying to the supply company, he should be entitled to cover them. Nobody is suggesting that he should not. However, he should not be entitled to add a profit margin, particularly when such charging is inadequately controlled. There have been frequent rip-offs, and substantial premiums have been charged.
The purpose of these amendments is straightforward. It is to ensure that it would be made an offence to sell electricity on to a tenant at a profit over and above the cost of buying it. That is a reasonable proposition. When a landlord wants more money from a tenant, that should be incorporated in the rent. That is particularly true given the liberalisation of the rent laws promoted by the Government. In the past, over-charging on electricity was one way that landlords got round the Rent Acts. Those Acts no longer apply, so there is no justification for this practice continuing.
The only people who should be making a profit are the supply companies. Introduce a middleman and consumers are ripped off. Often, they are those who are the most disadvantaged and weak. I hope that the Minister will accept that that is undesirable. If he cannot agree to the amendments, perhaps he can tell us how such a provision could be incorporated into the codes of practice or how our aim could be achieved by some other method.

Mr. Eric Illsley: As the hon. Member for Gordon (Mr. Bruce) has pointed out, the arguments on the resale of electricity by landlords were extensively rehearsed in Committee, but the Government appear to have chosen to ignore the points that were made then. I support the amendments, in particular as they relate to the ability of the landlord to profit from the resale of electricity through overcharging. The provisions of the Electricity Act 1957 have simply been restated in this Bill. They allow a maximum resale price for electricity, but there is an abuse of that and evidence of overcharging and profiteering by landlords.
The resale of electricity mainly affects people in the lower income brackets, people who may be less able to pay such profiteering prices. They are people who live in caravans and mobile homes, short-term accommodation or private rented accommodation. As a result of other recent legislation, tenancies have been altered, and we must bear in mind that a tenant who complains about being overcharged for electricity may be on an assured

shorthold tenancy that lasts for six months. Naturally, he will be reluctant to upset his landlord by complaining that he is being overcharged for electricity. 
7.45 pm
The methods by which electricity can be sold by a landlord to a tenant are extensive, and are set out in a document produced in 1985 by the Director General of Fair Trading. The document draws attention to the resale of electricity by landlords and points out that overcharging occurred to a great extent, but the Government have ignored that report. As the document says, these methods include:

"(a) The rent may be inclusive of electricity, the actual amount charged for it not being stated.
(b) There may be a separate charge made for electricity in addition to the rent, on the basis of an agreed fixed amount, which may however be subject to variations in electricity costs or consumption.
(c) The landlord may supply two or more tenancies with electricity and apportion the total charge among them (eg two 'bed-sits' in one house).
(d) The tenant may obtain electricity by inserting coins into a sub-meter which is either owned by the landlord or owned by the Electricity Board, but allocated to the landlord's account.
(e) The tenant may pay for electricity in accordance with the amount used (which may be based on the readings on the landlord's credit meter)."
The basic point is that the tenant often does not have access to the meter to determine how much electricity he has used, although the landlord does have access to the meter. The tenant has no way of measuring the amount of electricity that he has used or of comparing that to the price that he is being charged.
As I pointed out, under the Electricity Act 1957, area boards set a maximum charge for the resale of electricity, but the Act did not set out powers to enforce the maximum charge. Again, the Bill has no clause to enable the enforcement of the maximum charge. All that there is in the Bill is a simple carry-over of the provisions of the 1957 Act, which the director general's report shows to be unsatisfactory.
For the tenant who feels that he is being overcharged for electricity, the only avenue for redress is to make an application in the county court. This can be a daunting task, particularly if the tenant is unsure of his tenancy or does not wish to embroil himself in a dispute with his landlord that would involve him in taking his landlord to court. He is also faced with the difficulty of finding out in the first instance whether he is being overcharged or whether the landlord is merely conforming to the maximum resale price. Without such information, it will be difficult to challenge the charges.
The sale of other fuels is subject to the criminal law, but it is not a criminal offence to overcharge for electricity when it is resold. The Government should have addressed themselves to this anomaly when drafting the Bill. The Weights and Measures Act 1963 makes it a criminal offence to overcharge for coal, smokeless fuel, petrol, paraffin and liquid gas. Unfortunately, that Act does not apply to the resale of electricity. That can be compared with what happens when a consumer is late in paying his bill or cannot pay because of financial difficulties. In that case, the law is imposed with some force, the supply is disconnected and the person is sued for that amount by the area board or the supplier.
The first recommendation should be that the resale of electricity for a profit be prohibited. Overcharging by


landlords should be made a criminal offence as that would act as a deterrent. There is the argument that charging for electricity should be brought into line with charging for other fuels and within the remit of the 1963 Act. It is important to note that within the next few days the Government will be supporting a private Member's Bill that seeks substantially to amend the 1963 Act.
The burden should be taken from the tenant when it comes to taking action. There are considerable difficulties facing a tenant when he tries to ascertain whether he has been overcharged. If he takes that course and finds that he has been overcharged, he faces further difficulties in trying to find a remedy. The recommendations of the director general should be accepted and implemented.

Mr. Barron: The Minister will probably remember the debate in Committee during which we discussed the issues to which my hon. Friend the Member for Barnsley, Central (Mr. Illsley) has referred. We discussed whether the reselling of electricity at rates that could be assumed to be higher than normal should be a criminal offence. The Minister said in reply that under the Consumer Protection Act 1987 the Department of Trade and Industry was about to issue new regulations for the metering of gas and electricity. That debate took place in February, and we should like to know whether the regulations to which the Minister referred are likely to be introduced before the Bill complete its passage through Parliament.
Will the regulations require a landlord to itemise electricity bills? If he is reselling electricity, will he have to itemise the bills that he submits to a tenant? We were told that it would be a criminal offence if a landlord did not set out the price of the electricity in the bill that he submitted to the tenant or in the rent hook. We need to know exactly what the Department of Trade and Industry is proposing. We must see the regulations before the Bill completes its passage through the House. I hope that the House will excuse the pun when I say that we are in the dark.
Amendments have been tabled that seek to protect tenants from the criminal acts of some landlords who resell electricity. We do not know whether the DTI regulations will be as effective as the introduction of a criminal offence so that those who infringed the law could be taken before a court and punished. I hope that the Minister will tell us when we can expect the new regulations to be introduced. There must be protection from excessive charges for the reselling of electricity.

Mr. Lang: I understand the anxieties that led to the tabling of the amendment by the hon. Member for Gordon (Mr. Bruce). I understand also the anxieties expressed by the hon. Members for Barnsley, Central (Mr. Illsley) and for Rother Valley (Mr. Barron). However, I do not accept the implication behind the amendment that all landlords are rogues and exploiters. At the same time, I understand that the amendment refers to an area of sensitivity about which there are legitimate concerns. This group of amendments would have the effect of permitting the director to fix only one maximum price at which electricity might be resold. It would prohibit a landlord from making a profit when selling electricity to his tenants. There are practical reasons, apart from any others, that make it impossible to accept the amendments.
Amendments Nos. 111 and 112 would severely disadvantage many consumers. It is essential that the director's power to fix maximum prices at which electricity

may be resold should enable him to fix different prices to suit different circumstances and types of supply. The area boards' current system of tariffs identifies a number of different classes of consumer. The prices charged to the different classes reflect the different characteristics of supply for each class and the cost incurred in providing different supplies. We expect the system to continue in future.
The power given to the director by clause 40 will enable him to set a different maximum resale price for each tariff class if he considers it necessary to do so. He will be able to set a maximum resale price that will apply for domestic supplies. He will be able also to set a maximum price for commercial and industrial consumers.
I thought that the hon. Member for Gordon might draw an analogy with British Gas. In the event, he did not. The Director General of Gas Supply can set only one maximum retail price for gas because there is only one gas tariff. To permit the director to set only one maximum resale price for electricity would mean that if he were adequately to cover all classes he would have to set the price at a level that corresponded to the highest tariff rate. That would clearly be inequitable for those purchasing electricity from a landlord who was supplied at a lower rate. Perhaps the hon. Gentleman identified this problem himself. Having tabled amendments Nos. 111 and 112, he tabled amendment No. 113, which would introduce a new subsection (4). That would prevent a landlord making a profit from reselling electricity. In a sense, amendment No. 113 is designed to counter the effect of amendments Nos. 111 and 112. As I think I have demonstrated, the first two amendments are unacceptable and the third would not be necessary. It is in the interests of consumers that the director should have the powers that are given to him under clause 40. I understand also, of course, the anxiety about possible exploitation of tenants by landlords.
It is fair to say that landlords incur costs in the supplly of electricity. Those costs could include the provision, installation and maintenance of a meter, the installation and maintenance of electric wiring and meter reading, billing and collection. Some landlords may make a small loss in reselling electricity while others may make a profit. These are all factors that the director will need to take into account in setting the maxim um retail price. It would be impossible to examine every landlord's costs. The complexities and subjectivity of identifying the costs would make enforcement extremely difficult.
I can offer the hon. Member for Gordon some consolation and respond to the issues raised by the hon. Members for Barnsley, Central and Rother Valley. We are concerned, as are hon. Members, with the need to protect consumers. We cannot prevent some landlords from making a small profit, but we have taken steps to ensure that a landlord cannot recover from a tenant more than he is entitled to charge.
The regulations which were mentioned in Committee and to which the hon. Member for Rother Valley referred are to be introduced by the Department of Trade and Industry later this year under the Consumer Protection Act 1987. They will relate specifically to the resale of gas and electricity and will require landlords who resell electricity or gas to tenants for domestic use other than through a fixed charge in the rent to provide itemised bills that show the number of units charged for, the rate at which the electricity has been supplied, and the statutory maximum rate. A landlord who fails to provide this


information adequately will be committing an offence and will be liable to prosecution by a trading standards officer. It will be an additional offence to that of giving a misleading indication of price, which is provided for already in the Consumer Protection Act.
The proposals, which have already been circulated in draft, have been welcomed by the Electricity Consumers Council, other consumer bodies and local authority trading standards organisations. We believe that they are the right way forward to deal with a possible abuse of the system. I hope that, in the light of my comments, the hon. Member for Gordon will withdraw the amendment.

Mr. Malcolm Bruce: I am grateful to the Minister for his comments. I accepted in my opening remarks that there are some practical difficulties. I am pleased that the Minister has acknowledged that the abuse that has existed should be removed from the system. It was never defensible when the industry was in the public sector and it would be even less defensible following the transfer of the industry to the private sector.
I am encouraged by what the Minister says about the regulations that are coming forward. I acknowledge that clause 40, even without the amendments, allows the director to fix maximum prices. In a sense, the purpose of tabling the amendments and initiating this short debate is to give to the director a clear sign of the feeling within the House and to highlight the abuses that we are anxious to have removed. I hope, therefore, that the Director General of Electricity Supply, reinforced by the regulations about which the Minister talked, will ensure that, apart from minor adjustments on a technical basis, the practice of selling electricity to sitting tenants at a substantial profit and as a means of supplementing the rent will not continue in any worthwhile commercial sense. That will not happen automatically because of the measures that have been tabled, but there is unanimity on both sides of the House about the desirability of ending that practice. In those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8 pm

Clause 44

PUBLICATION OF INFORMATION AND ADVICE

Mr. Lang: I beg to move amendment No. 53, in page 34, line 46, at end insert—
'(3) The Director General of Fair Trading shall consult the Director before publishing under section 124 of the 1973 Act any information or advice which may be published by the Director under this section.'.

Madam Deputy Speaker: With this it will be convenient to take Government amendments Nos. 54 to 63.

Mr. Lang: This is a group of technical amendments. Amendments Nos. 53 and 55 relate to clauses 44 and 46 respectively and are aimed at preventing the wasteful duplication of effort. Amendment No. 54 relates to clause 45 and adds to the information held on the public register kept by the director general. Amendments Nos. 56 to 63

relate to clause 53 and provide additional disclosure gateways through which information may be disclosed to specified statutory or public bodies.
Amendment No. 63 arises from an undertaking that I gave in Committee to the hon. Member for Cardiff, West (Mr. Morgan) to consider whether it would be appropriate for environmental health departments to be included in the list of organisations to which information might be disclosed. He believed that councils should have access to information about excessive discharges of dirt and dust. I understand that the legislative plans of the Department of the Environment include giving local authorities greater power over air emissions so that operators will need local authority consent before plants can operate.
We do not think that it is necessary to include environmental health departments in the list now, but I have carefully considered the hon. Gentleman's point. Amendment No. 63 is designed to empower the Secretary of State to make orders creating gateways to such departments or other organisations as appropriate in the future. There is the possibility that not only could we meet the hon. Gentleman's point should the need arise, despite the further powers to be given to local authorities on air emissions, but we could go wider and include other organisations.

Mr. Doran: In introducing amendments Nos. 53 and 55 the Minister mentioned that one of the aims was to prevent the wasteful duplication of effort. I believe that by removing the obligation on the Monopolies and Mergers Commission to include references by the director general under the Bill, additional effort may be required to have an overview of the commission's work. Has the Minister considered that point?

Mr. Lang: The hon. Gentleman's suggestion goes further than the Bill's provisions. The director general will take a close interest in such matters anyway and has adequate powers to keep an eye on them. To suggest that there should be some further change in powers to oversee the activities of the Monopolies and Mergers Commission is to go further than the Bill's provisions.

Mr. Doran: There has been a misunderstanding. My understanding of the amendment is that the Monopolies and Mergers Commission and the Director General of Fair Trading are not required in their reports to mention referrals by the Director General of Electricity Supply under the Bill. I am concerned with the overview of the work of those two other bodies which these clauses affect. The legislation may create extra work.

Mr. Lang: That is not the intention, nor is it our expectation.

Mr. Morgan: The Minister said that the Secretary of State may wish to make orders following new legislation about clean air monitoring and the powers of local authorities, so surely the hon. Gentleman recognises that environmental health departments of borough and local authorities in England, Wales and Scotland already have clean air responsibilities. It is peculiar to leave this aspect out of the legislation. Is the hon. Gentleman considering tabling a further amendment in another place?

Mr. Lang: We are not contemplating that at the moment. It would not be sensible to reopen the debate that we had in Committee on clause 52 when we considered the


matter in detail and made clear the limited context in which the clause operated. It was clear that the various gateways provided in the Bill were adequate. I undertook to consider the point further both in the context of the specific point of dust and dirt to which the hon. Gentleman referred and in the general context. We have now come forward with a power to enable the Secretary of State to add names to the schedule by regulation, and I think that that is a desirable way forward. Hon. Members are at one in that purpose and we believe that our amendment meets the practical needs of the situation.

Amendment agreed to.

Clause 45

KEEPING OF REGISTER

Amendment made: No. 54 in page 35, line 6 after 'and', insert
`every exemption granted to a particular person;(aa)'.—[Mr. Lang.]

Clause 46

ANNUAL AND OTHER REPORTS

Amendment made: No. 55, in page 36, line 16 at end insert—
'(6) Section 125(1) of the 1973 Act (annual and other reports) shall not apply to activities of the Monopolies Commission on which the Director is required to report by this section.'.—[Mr. Lang.]

Clause 52

GENERAL RESTRICTIONS ON DISCLOSURE OF INFORMATION

Amendments made: No. 56, in page 38, line 28, after `Authority', insert—
'(viia) the Insolvency Practitioners Tribunal;'.

No. 57, in page 38, line 32, after 'enactments', insert 'or instruments'.

No. 58, in page 38, line 32, at end insert—

`(bb) for the purpose of enabling or assisting the Secretary of State to exercise any powers conferred on him by the Financial Services Act 1986 or by the enactments relating to companies, insurance companies or insolvency or for the purpose of enabling or assisting any inspector appointed by him under the enactments relating to companies to carry out his functions;
(bc) for the purpose of enabling or assisting an official receiver to carry out his functions under the enactments relating to insolvency or for the purpose of enabling or assisting a recognised professional body for the purpose of section 391 of the Insolvency Act 1986 to carry out its functions as such;'.

No. 59, in page 38, line 38, after 'enactments', insert 'or instruments'.

No. 60, in page 38, line 41, after 'enactments', insert `and instruments'.

No. 61, in page 39, line 6, at end insert—
`(kk) the Insolvency Act 1986;'.

No. 62, in page 39, line 7, at end insert—
'(m) any subordinate legislation made for the purpose of securing compliance with the Directive of the Council of the European Communities dated 10th September 1984 (No. 84/450/EEC) on the approximation of the laws, regulations and administrative provisions of the member states concerning misleading advertising.'.

No. 63, in page 39, line 7, at end insert—

`(3A) The Secretary of State may by order provide that subsections (2) and (3) above shall have effect subject to such modifications as are specified in the order.'.—[Mr. Lang.]

Clause 59

INTERPRETATION ETC. OF PART I

Amendments made: No. 64, in page 43, line 41, at end insert—
'"generating station" in relation to a generating station wholly or mainly driven by water, includes all structures and works for holding or channelling water for a purpose directly related to the generation of electricity by that station;'.
No. 65, in page 44, line 13, leave out '7(2)' and insert `16(1 )'—[Mr. Lang.]

Clause 60

TRANSFER OF PROPERTY ETC. OF AREA BOARDS

Mr. Michael Alison: I beg to move amendment No. 189, in page 44, line 40, after 'property' insert
`(except dwelling houses in the Board's ownership let or leased to Board employees, which such employees have registered a wish to purchase)'.

Madam Deputy Speaker: With this it will be convenient to take amendment No. 190, in clause 61, page 45, line 9, after 'property', insert
`(except dwelling houses in the Generating Board's ownership let or leased to Board employees which such employees have registered a wish to purchase)'.

Mr. Alison: This probing amendment is designed to elicit information and reassurances from my hon. Friend the Under-Secretary of State affecting the right-to-buy prospects of some CEGB tenants who live at Barlow near Drax in my constituency. Strictly speaking, the CEGB is not subject to the right-to-buy legislation in the Housi rig Act 1980, but there are a number of other public bodies which likewise are not subject to that legislation which still operate it in practice and in the spirit of the 1980 Act. For example, some police authorities sell surplus police houses to their officers at discounts equivalent to those obtaining under the right-to-buy policy. British Coal sells former National Coal Board houses to tenants at half their market value—at 50 per cent. discounts. I am advised that no less than three-quarters of all former NCB houses have already been sold to their tenants.
I am glad to say that, like the police authorities to which I referred and British Coal, the CEGB has accepted the spirit of the 1980 Act and has announced and, I believe, promulgated to some extent a policy of selling some of its rented properties to its tenants who wish to buy. Of course, nothing like as many houses are involved with the CEG.B. I think that the generating board has only about 1'70 houses and flats in England and Wales. However, in respect of some of the CEGB rented properties at Barlow near Drax, I am not entirely happy that the generating board is measuring up fully to the spirit of the Housing Act 1980 or to the scale of generosity of discounts either as provided for local authority tenants under the Act or as voluntarily operated by, for example, British Coal. M y hon. Friend the Under-Secretary of State may be able to reassure me. If so, I shall not press the amendment.
When I last met my Barlow constituents, a number of them had been waiting for an offer for sale for years, sometimes right back to 1981. That is a long time to wait, especially when one realises that the 1980 Act provides


time limits which local authorities must observe in disposing of houses to tenants who wish to buy. Moreover, all the potential Barlow buyers have been offered discounts only within the modest range of 20 to 30 per cent. When one considers how house prices have risen in Yorkshire recently, that leaves a large mortgage to be raised by a potential purchaser. I am hoping that my hon. Friend can say that better discounts may be forthcoming.
Let me remind my hon. Friend and the House of the going rate of discounts elsewhere. The present discount level for council houses starts at 32 per cent. after two years' occupation, with an additional 1 per cent. discount for each extra year of occupation, and the maximum discount is no less than 60 per cent. reached after 30 years' occupation. The discount for flats starts at 44 per cent. after two years' occupation and increases by 2 per cent. for each extra year of occupation, reaching a maximum of 70 per cent. after 15 years' occupation. One should compare that to the maximum discount offered by the CEGB. I was advised recently—although it may be flexible and my hon. Friend may be able to reassure me—that it is only 30 per cent. Police authorities sell houses surplus to requirements to police officers at discount rates equivalent to those I have I have cited for local authorities. I have already mentioned that British Coal disposes of its properties at a 50 per cent. discount.
Since constituents at Barlow first raised the matter of discounts with me, I have had some correspondence with the CEGB property services manager for the north of England, Mr. K. J. Howes, at Harrogate and with my right hon. Friend the Secretary of State. I am glad to say that Mr. Howes has taken an active interest in the satisfactory disposal of the Barlow houses to the tenants, but I am still not quite clear about the level of discounts that may be offered. That is relevant to the attitude I take towards the amendment. I hope that my hon. Friend can give me some encouragement and belief that discounts closer to those applying in local authorities, or as operated by British Coal or some police authorities, may be under consideration by the CEGB.
It would be of great interest if my hon. Friend could tell me what will become of the right-to-buy prospects of tenants who have not yet decided that they want to buy, but who may decide to buy in the next few years, when the properties move from the ownership of the CEGB to the ownership of the new, big trading body. Will there be any moral—obviously, not legislative—obligation on the new owners to do what the police, British Coal and the outgoing CEGB have all done, which is to accept a moral obligation to match in some respects the local authority rights under the Housing Act 1980? Perhaps my hon. Friend will be kind enough to advise us about those points.

Mr. Michael Spicer: I must say first to my right hon. Friend, as a matter of generality, that clauses 60 and 61 provide for all property rights and liabilities of the area boards—and of the CEGB in the case of clause 61—to be transferred to the successor companies nominated for the purpose by the Secretary of State. We would not want to change that generality. Secondly, my information is that the Barlow example is the only large group of houses that raises the problem that he has, quite properly, brought

before the House this evening. There are a handful of other similar properties for which the CEGB does not envisage any problem in negotiating the sale to the occupiers.
I can tell my right hon. Friend that the CEGB is seeking to reach a satisfactory conclusion with the Barlow tenants involved and hopes to be able to complete the sales before the end of 1989. In direct answer to the point raised, should it be impossible for any reason to do that, I would expect National Power, to which the houses in question are expected to be transferred, to honour the intention of the CEGB to sell on terms to be agreed with the incumbent tenants. Although I would not wish to intervene in the matter, should there be any unreasonable difficulties about the terms of the sales, I would want to make inquiries myself of the CEGB to discover what the problem was. However, I am hopeful, as is the CEGB, that the matter can be resolved before the transfer takes place. If that is not the case, I would expect the sale to take place under the successor companies.

Mr. Alison: My hon. Friend was kind enough to suggest that he would keep a watching brief on the matter. Will the watching brief extend specifically to the question of the ultimate discounts offered? I am not asking him to be specific about an acceptable level, although I have described what I feel is a lowish level of discount. If I complain to my hon. Friend that the discounts remain too ungenerous, will my hon. Friend agree to intervene or at least to have a look at the matter?

Mr. Spicer: As my right hon. Friend no doubt senses, I am extremely anxious not to become involved myself as it would not be appropriate. However, if I felt that any action taken was totally unreasonable or was a wrecking proposition, I would want to know about it. There is no compulsion on discount rates, but it is the board's intention that the houses should be sold. I would want to be reassured that there was nothing unreasonable in the proposals, but I cannot give my right hon. Friend any guarantees about the precise rate of discounts, nor would he expect me to do so.

Mr. Barron: This is a fascinating scenario. Will the Minister take into account that coal miners who supplied the old Drax power station and the new one have, since the mid-1970s, received a 50 per cent. discount on their public body houses from the former National Coal Board? It seems grossly unfair that another public body is thinking of selling its properties with lower discounts than that.

Mr. Spicer: That is a rather helpful intervention. It is interesting to know that the official Opposition support my right hon. Friend. I repeat that I would want to be sure that no unreasonable proposition had been made. It is helpful to have the Opposition's views on record in a positive and helpful way.

Mr. Lofthouse: The Minister mentioned that the purchase of the houses would take place before privatisation—if possible. Surely it must be possible. Those people to whom the right hon. Member for Selby (Mr. Alison) referred have been waiting for years and we are talking about only a small batch of houses. It should be possible to tie up such a deal before privatisation with the goodwill of the CEGB. The CEGB is morally obliged to give similar discounts to those given by local authorities.

Mr. Spicer: I shall ensure that as soon as Hansard comes off the presses tomorrow morning, we shall run hot foot to the CEGB and explain that the Opposition are now enthusiastic about the sale of public sector houses to the private sector with appropriate discounts. It is extremely good news and I shall ensure that the Opposition's views are drawn to the attention of the CEGB as soon as Hansard comes off the presses tomorrow.

Mr. Alison: On the basis of the assurance that my hon. Friend has kindly given—particularly in his commitment to the concept of reasonableness as a trigger, now also adumbrated by Opposition Members having regard to local authority and National Coal Board discounts—I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Morgan: I beg to move amendment No. 223, in page 44, line 48, at end add—
`(2A)(1) Six months after the date of transfer of all property rights and liabilities of each Area Board, the company nominated in accordance with this section shall publish a valuation of

(a) Those capital assets of the Area Board utilised for the transmission of electricity; and
(b) Those capital assets of the Area Board not so utilised.
(2) Such valuations shall be based on the open market value of said assets at the date appointed by the Secretary of State under subsection (1) above.'

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take amendment No. 161, in clause 61, page 45, line 14, leave out `(b)' and insert—
`(bb) the Secretary of State shall make proper and reasonable provision for retention of the transmission system in public ownership.'

Mr. Morgan: I read with interest in this morning's Financial Times that a double Olympic gold medal had been awarded to a Conservative Back Bencher, the hon. Member for Stamford and Spalding (Mr. Davies), and a junior Minister, the Under-Secretary of State for Industry and Consumer Affairs. They had been the hon. Members to vote most consistently in accordance with the views of the Adam Smith Institute and were deemed to be the most freedom-oriented hon. Members. I note that the hon. Member for Darlington (Mr. Fallon) is looking surprised that he did not win it. I understand that the Under-Secretary of State for Industry and Consumer Affairs had been taking steroids in an attempt to achieve an outright win, but he did not make it.
Hon. Members may be mystified as to the relevance of my remarks. It is that, given their views on the national grid, the Secretary of State and the Parliamentary Under-Secretary of State will not win such an award. They must have thought about selling the national grid as a private company, but they funked it. This is the appropriate stage at which to consider why they decided that the national grid should remain at one remove from the market. They have not kept it in the public sector, as we ask them to do in amendment No. 161, but they are not committing it to the furnace of the free market either. It will have semi-privatised status. Nobody will be able to touch it. Market forces will not be able to touch it and, although it will be owned by the 12 area boards, they will not be able to mess about with it much either. They cannot make a commercial asset out of it. It will be a separate plc

with its own capital budget and non-executive directors and the area boards will not be able to determine what happens to it.
Why is that? Is it a curious omission of the Government, or is it a recognition by them that certain aspects of the electricity industry constitute public infrastructure rather than business? There are business aspects to all infrastructure provision and many businesses are also infrastructure. Part of the electricity industry is a heating business, as is British Gas, but only 25 per cent. or less of the electricity industry is a competitor for British Gas, which has already been part privatised, with 51 per cent. of the shares being sold. The Government seem to recognise that electricity and the national grid are part of the infrastructure. There are security of supply and national security arguments at stake, and the national grid thus falls clearly within the definition of infrastructure.
The importance of the Government's funking the issue and their willingness to give up their Adam Smith Institute gold medals for another year or so lies in the fact that they recognise that problems arise when one permits full risk-bearing equity participation in certain types of businesses. Those are businesses from which the public has a right to expect something. The fact that the demands of the Government and the public can be expected to weigh heavily on such businesses makes them totally inappropriate for full risk-bearing equity participation which allows a company to go bust or to make an absolute fortune. The Opposition believe that that is unacceptable for the electricity industry as a whole, and even the Government recognise that it is not acceptable to submit the national grid to those conditions—to the risk of going bust or to the opportunity of exploiting its monopoly position to make a fortune.
The Government are now telling us, "The industry is not that kind of industry". In that case, why not go the whole hog and leave it in the public sector, where we believe it belongs? We hope that we shall see a flicker of recognition—even if there is no cross-voting on the issue —of the fact that, although the Minister's American guru recommended that the national grid should become a private sector transmission company, the Government have had to concede that, although that may be possible in the United States, we cannot do it in Britain. If they concede that, amendment No. 161 represents the obvious solution.
Some other aspects of the national grid are worth thinking about. The Government have structured the National Grid Company so that it can transmit, and has the obligation to try to transmit, cheap electricity economically and efficiently to comply with security of supply regulations and facilitate competition in the generating industry. One thing that it cannot do is to buy and sell electricity. Why is that? Why are not the Government willing to make the national grid the wholesaler of electricity—as it is now for all practical purposes? Why have they removed that capability? The reason is that it would make it far more difficult for private generators to enter the industry if the nation grid could buy and retail on to the area boards or big industrial consumers.
The Government have made a serious mistake—which will cost the consumer hundreds of millions of pounds every year—by denying the national grid its natural role in the wholesale purchase and retail distribution of electricity to the area boards. The reason for that is simple. Under the


new system, if a major supplier such as National Power suffers from a major technical problem, it will be more difficult to deal with it. Ludicrous though it may seem, large and small power stations at the edge of the sea sometimes suffer when sea water covers their cooling water intake screens. If that happens, the power station has to be knocked off and thousands of megawatts have to come off line.
Under the present system, the national grid says, "Drax cannot be used for the next hour, or until the sea water is cleaned off the screens. We shall use the next cheapest power station that we have in reserve and bring it on line". Will that happen in the future? It would happen if the Government agreed to making the national grid the wholesaler. But under the new system National Power will have the obligation to bring its next cheapest power station on line, and that power station may not be the cheapest power station that is off line and waiting in reserve.
We are given to understand by electricity industry experts that that could mean an additional cost of £200 million a year to the consumer, all because the contracting generator will have the obligation to provide the next best power station that he has available rather than the national grid's being able to use the lowest unit cost alternative generator in the event of a major generating station or major transmission line breakdown. The Government should seriously think about the penalty to the consumer of not allowing the national grid to buy and sell power but merely allowing it to act as an inert and passive common carrier.
The national grid should also carry the obligation to supply. It makes no sense for the area boards to have the obligation to supply to the consumer. The national grid will be a plc owned by the 12 area boards, but it will nevertheless be an entirely separate operation. If it had the obligation to supply, major savings to the consumer would accrue.
Look at the lawyers' paradise that will be created by placing the obligation to supply on the area boards. Suppose that a major customer—say the steel industry in Yorkshire—finds that as a result of a voltage fault its steel is solidifying in its electric arc furnaces. The problem has nothing to do with the industry, which may have provided all the necessary contracts and a 10 per cent. margin over and above the highest winter demand. A generating or national grid fault may result in a sudden loss of power sufficient to wreck the induction furnaces or electric arc furnaces. The customer sues the area board; he cannot sue anyone else. The area board then has to sue the national grid or the generating board for the failure. Two or possibly more legal actions could be taking place at the same time.
If the national grid had the obligation to supply, that would simplify the whole system because it would have the obligation to provide the power, the alternatives to the power and the insurance on the alternatives through the national grid system.
The Under-Secretary of State has already referred today to the fact that his aim in life is to stop decisions being made behind what he called the "baize doors" in Whitehall and to have them made in the market place. I imagine that he does not want to see all the decisions being made in the High Court. However, he has devised a system

that will undoubtedly prove to be a lawyers' paradise. In our opinion, these problems will have to be solved in another place, if not in this place.
The national grid is the right body to have the obligation to supply, and it is the right body to have the obligation to buy and sell power at the minimum unit cost to the consumer.
8.30 pm
I turn now to the contract system that will be devised around which the national grid will have to operate and which refers to the area boards, as does amendment No. 223. The Government's rhetoric says that an area board will have the right to place a contract with a generating station that can provide it with the cheapest power. The south Wales area board will in future buy from whichever is the cheapest station, which could be Aberthaw, its local big station. Yorkshire will buy from Drax and the East Midlands will buy from High Marnham or Ratcliffe-on-Soar, and the southern area boards will buy mainly nuclear, with a bit of oil and a bit of Didcot or whatever coal-fired power stations are nearby. We can see the problem immediately. A southern area board does not have cheap fossil fuel nearby. The South Western area board has only nuclear power nearby at Didcot, Aberthaw and at Fawley, on the fringes. Therefore, the power is much more expensive than is the power for the area boards in south Wales or in the north.
What is the Government's solution? Is it the free market? I was going to use a non-parliamentary expression to answer that, but I shall not. It certainly is not the free market. It is a "Sir Humphrey" solution. The Government have devised the nuclear quota by which the South Western area board will buy, say, 15 or 20 per cent. of its power from nuclear sources instead of the 80 or 90 per cent. that one might have expected. Once one has allocated for the nuclear quota around the 12 area boards, those area boards can have a maximum of only 80 per cent. fossil power. The southern area boards must then buy fossil fuel long distance, a little bit from Didcot obviously, but mostly from Yorkshire and Nottinghamshire.
When that is replicated over the country, it has to be spread out so that the 12 area boards will be doing something remarkably like what they do today. Once one has redistributed the 15 to 20 per cent. nuclear quota around the 12 area boards, one must then redistribute around the 12 area boards the 80 or 85 per cent. fossil quota. Because of the nuclear quota, one cannot have a wonderful system of local identification between south Wales and Aberthaw, Yorkshire and Drax, and East Midlands and Ratcliffe-on-Soar. Therefore, there will not be any way of minimising one's transmission costs and identifying with the local generating station or of being able to get some real buzz in the business whereby everybody realises, "If we produce cheaper power, it will be good for our local industries" or anything like that because this is a "Sir Humphrey", a "Mad Hatter's tea party" system.
Finally, I remind the Minister that the new system of contracts is supposed to be operational by 1 October in shadow form and be in its full commercial form by 1 January 1990. The Minister already knows that that cannot be done either by 1 October or by 1 January next year, except in some attenuated, "weak tea" transitional form which is remarkably like the present bulk supply tariff system. The Minister will not admit it, but he knows


that that is what the area board chairmen are saying and that that is what those who are trying to devise the computer programme that will supply the despatch system and the settlement system for the contracts are saying. I am fairly sure that his own more local advisers are telling him, "If you want it by 1 January, you can have it, but it will look very much like the present system. If you want what it says in the rhetoric of the speech that you gave at last year's Tory party conference and more importantly what you want to say in the one that you hope to give at the next two Tory party conferences, you won't get it by 1 January." I hope that the Minister will be politically mature enough to admit that tonight.

Mr. Hardy: I shall be relatively brief because my hon. Friend the Member for Cardiff, West (Mr. Morgan) has already put forward exceedingly powerful arguments. Unfortunately, our experience of the Bill does not give us cause for great optimism that the Minister will respond to his entirely sensible views.
The Government are confused. The Minister dare not retreat from the market force attachment, or the medals from the Adam Smith Institute to which my hon. Friend referred will be at risk. However, the fact is that the Minister is in a preposterous position. He has said that the Government will retain the best elements of the merit order system. The best element—the only element—of the merit order system is that the consumer obtains the cheapest possible available electricity. If the Minister departs from that principle, he cannot retain elements of it.
My hon. Friend the Member for Cardiff, West spelt out in detail that if National Power's cheap power station goes off line, it will not be the next cheapest power station that will supply the supplier with electricity; it will be National Power's next cheapest or perhaps its next nomination. That is not satisfactory. Rather than act with good sense and serve the consumer well, the Government have clung to their dogma.
I cannot see any sensible reason why the national grid should not remain in public hands or as an impartial wholesaler. An impartial wholesaler could act with good sense to ensure that there is encouragement for proper, sensible and wise developments in electricity generation. It could deter the insidious trader who may well be eagerly cheering the Government in their preposterous position. An impartial wholesaler could discourage those who are more concerned with financial massaging and manipulation than about the generation of electricity. People who can see through this muddled hotch potch see an opportunity for profit from the "take or pay" principle.
I do not suppose that any words from Opposition Members will persuade the Minister that good sense is necessary, but they should at least be on the record and that is why I am making this brief speech. I want to make it clear that on 10 April 1989 when the Bill was in its final stages there were those who said that the national interest suggested that a different arrangement would be sensible.
The Government are putting an enormous obligation on the director general. When one looks at the relatively meagre resources that the director general and the regulator will enjoy, one can see that it may later be regretted that the national grid was not given a more powerful and independent role in the industry. If the national grid were to remain in the role that we have been urging, the job of the regulator would be more effective.
As I have said, we cannot expect the Minister to accept our suggestions, because he will not have been given permission to do so before the Secretary of State flew off to Red Square. However, at least the Minister should explain to the House the elements of the merit order system that he will retain. We need to know that. I also want to know what steps he will take to ensure that the national grid has a capacity to apply a little wisdom in differentiating between the nearly crooked and the commendable in terms of generation development.
Finally—I am sure that you, Mr. Deputy Speaker, will appreciate this brief point—while we are talking about transmission, does the Minister recognise that Yorkshire consumers, and perhaps east midlands consumers also, have, because of their acceptance of the national interest, borne the fact that they have been subsidising some of the wealthier areas of this country because they have been paying rather more for their electricity than they would have done if they had not been contributing to the loss in transmission of a significant amount of electricity?
Once we have gone to market forces—once the market force application, and so on, imbues the whole electricity industry, as the Government intend—what concession, what assistance, what recognition of past sacrifice will be afforded to the consumers, certainly the consumers of the Yorkshire area? I do not believe that the Government, having decided to pursue the course of selfishness, could then turn round and say to the Yorkshire electricity consumers, "You will carry on exactly as you have been doing." If they do, we will take a rather more serious and rather more caustic view.
I hope that the Minister will be able to answer those questions. In particular, I implore him to explain to me how he can retain anything like the merit order system in the muddled and foolish confusion that the Government have created by this route.

Dr. Kim Howells: How does the Minister think the grid will offer choice for the consumer? It will be one grid, after all, and, with the best will in the world—I am trying to be as generous as possible to the Minister, because I know that he has a very difficult task to explain this—there will be a national grid company. Consider Sunday lunch time. Will we plug in to "On the Record" from PowerGen, and, when we decide to cook the Sunday lunch, will we plug in to National Power? Of course not. Will we watch "The Big Match" via ICI's sales to the grid? Of course not. It will be a national grid company, controlled by the area boards, that controls prices. It will, of course, be a cartel manifested in a single company. As our industry becomes more and more dependent upon electricity—and it will —we will find that this most vital of supply grids is controlled by the very people who are selling the stuff. They will do as I imagine all commercial companies do—try to get from the British public the highest possible profit. Of course, they will favour long-term "sweetheart" agreements with generating companies.

Mr. Hardy: The French.

Dr. Howells: Of course they will be looking to the French. Incidentally, I hope that the next time there is a strong wind from the Channel—one that does not originate in this House—the Minister will not allow the French suppliers to switch off the juice before the wind hits


Britain. I hope that we will not be stuck trying to find 2,000 MW in the south of England because the French have decided to protect their own supplies.
The companies will favour comfortable long-term "sweetheart" agreements with generating companies. It will not be competition. It will not be a question of looking around for generators that are ready to supply the cheapest electricity. It will be a series of private monopolies. They will be looking for trouble-free supplies —and so they should—but there are so many inconsistencies in this Bill, and we will be so increasingly dependent upon electricity, that they will have to look around for trouble-free supplies and "sweetheart" agreements.
But what about price? What will happen to price? We will have a series of cartels and a company that is a mouthpiece for those cartels, and prices will be increased so that profit levels may be cranked up as much as possible.

Mr. Peter Rost: I have been following very carefully the hon. Member's arguments and those of his colleagues. Can the hon. Member explain what motive there could possibly be for the new area boards and distribution companies not to shop around through the grid for the cheapest possible supply, but to do as he suggests—up the price? Surely the whole purpose of the structure that the Government propose is to give the new distribution companies the opportunity to buy in from the cheapest possible sources. What motive could they possibly have for doing otherwise?

Dr. Howells: I thank the hon. Gentleman for his question. It is a good one because it affords me the opportunity to say that I believe that this Bill will allow the distribution companies to acquire power stations and, thereby, begin to control the local areas, not just in terms of the sale of electricity but in terms of its generation. It seems to me that in those circumstances the customer will be in very big trouble indeed. There will no longer be a chance to regulate supplies and costs. What we will have is an enfranchised monopoly, a private monopoly, over which we, as representatives of the customers in those areas, will have no control.

Mr. Michael Spicer: The hon. Member for Cardiff, West (Mr. Morgan) opened his speech by saying that we had kept the grid neither in the public sector nor fully in the private sector. He made that point as a matter of criticism of the Government. Another way of looking at it is through our eyes. We have given the industry the benefits of privatisation—for instance, employee involvement in shares, Companies Act accounts, and motivation to efficiency. That is why we cannot accept amendment No. 161, which would result in the grids being kept in the public sector.

Mr. Morgan: The Minister says that employees will be given shares. In the national grid?

Mr. Michael Spicer: There will be arrangements whereby employees of the grid company will be able to own shares in the industry. That will, of course, motivate

them in the way that I have suggested—something that would be denied to them by the Labour party and, in particular, by this amendment.
On the other hand, we have provided for the benefits that undoubtedly accrue from an integrated network. The Opposition—this is a new one; as a matter of fact, it is one of the first new things to have come up tonight—apparently want us to provide for a market-making capacity, a monopolistic buying capacity. The hon. Member for Pontypridd (Dr. Howells) was particularly enthused about that. On the other hand, we are concerned to allow the grid company to be a common carrier. That is quite specifically what we wish it to be because it is central to our concept of competition amongst generators.
The hon. Member for Cardiff, West asked—I think he was asking, though perhaps he was just making a statement; in any case, I took it to be some sort of question —whether or not, and how, we would be retaining any aspects of the merit order despatch arrangement. Certainly the hon. Member for Wentworth (Mr. Hardy) raised this question. Quite manifestly, the answer is yes, and it will be done on the basis of bid prices into the generator pool. Of course, that will be done regardless of who owns the station. It will be a matter of encouraging those who are able to come forward with the best bid prices to do so and, as a result—subject to the stability of the system which, of course, will remain the responsibility of an integrated network company—they will be able to sell their wares through the common carriage arrangements that the network will provide. We do not see that there will be any problem about this, other than in the minds of those who wish to see some sort of monopolistic situation being returned—in this case, through the operations of the grid company. That is precisely what the whole thrust of this Bill is aimed at avoiding.
The hon. Member for Cardiff, West made a quite legitimate and proper point in saying that the non-fossil fuel obligation intervened and distorted, to an extent, the workings of this competitive regime to which I have alluded. We have never, in any way or at any point, disguised from the House, or from anybody else, the fact that the non-fossil fuel obligation is, of course, a distortion in the market place. We hope that that distortion will be temporary as the nuclear levy becomes unnecessary. On many occasions we have told the House why we wish to have part of the electricity in this country provided by nuclear power, and I do not intend to weary the House by going over the argument again. The reason why we want a nuclear industry is fully on the record. On that basis I defend the undoubted distortion which will exist in a minor way under the competitive regime that we are presenting to the House. There is no way that we wish to accept the amendments and on that fair, cogent exposition I hope that the hon. Gentleman will feel able to withdraw his amendment.

Mr. Morgan: I shall respond in like manner. The Minister is slightly wrong: regardless of his exposition I shall withdraw the amendment in the hope, possibly a vain one, that the other place will attend to these matters with its greater ability to think independently.
The Minister's reference to preserving the best aspects of the merit order system under the new contract system is phoney. Mr. Montague of Linklaters and Paines, one of


the leading solicitors firms in the City that are looking into this on behalf of the industry or the Government—I forget which—is one of many who has said:
Profit is likely to be included in capacity charges rather than energy charges.
Mr. Montague said that at The Economist conference on electricity privatisation before Christmas. In other words, before any generator submits his generating station into the merit order pool, he has already made his money in the contract simply by being there. In that case there is no incentive for him to reduce his unit cost or for the national grid to buy from his generator because its unit cost is low.
Although we fully maintain our arguments and strongly reject the Government's arguments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 61

TRANSFER OF PROPERTY ETC. OF GENERATING BOARD AND ELECTRICITY COUNCIL

Mr. Lang: I beg to move amendment No. 66, in page 45, line 44, after 'including', insert
`rights to receive any sums by way of repayment supplement and'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment Nos. 87 and 88.

Mr. Lang: Amendment No. 66 is a technical amendment. Its purpose is to ensure that any repayments of corporation tax which might turn out to be overpaid would also be accompanied by repayment supplement due as a result of those repayments.
Amendment No. 88 is a technical amendment to remove any doubt on the effect of paragraph 8 of schedule 11 which was inserted in Committee. It is designed to ensure that tax allowances transferred from one company to another can be utilised by the second company. Amendment No. 87 is a drafting amendment.

Amendment agreed to.

Schedule 10

TRANSFERS UNDER SECTIONS 6I AND 62

Amendment made: No. 67, in page 108, line 1, leave out `by' and insert 'in pursuance of'. —[Mr. Michael Spicer.]

Clause 73

TREASURY GUARANTEES FOR LOANS MADE TO THE SCOTTISH COMPANIES

Amendment made: No. 68, in page 52, line 32, leave out `in Scotland'.—[Mr. Michael Spicer.]

Clause 75

FINANCIAL LIMITS ON BORROWINGS ETC.

Amendments made: No. 69, in page 54, line 25, after 'of' insert '(a)'.

No. 70, in page 54, line 26, leave out from 'Wales' to end of line 28 and insert
`and

(b) sums issued under section 73 above in fulfilment of guarantees given in respect of loans made to such companies,
shall not exceed £2,000 million.'.

No. 71, in page 54, line 32, leave out
`in fulfilment of guarantees under section 73 above'
and insert
`under section 73 above in fulfilment of guarantees given in respect of loans made to successor companies in Scotland'.

No. 72 in page 54, line 34, leave out subsection (3).— [Mr. Michael Spicer.]

Clause 76

RESPONSIBILITY FOR COMPOSITE LISTING PARTICULARS

Mr. Michael Spicer: I beg to move amendment No. 73, in page 54, line 37, leave out subsections (1) and (2) arid insert—
'. —(1) Where—

(a) the same document contains listing particulars for securities of two or more successor companies; and
(b) any person's responsibility for any information included in the document is stated in the document to be confined to its inclusion as part of the listing particulars for securities of any one of those companies,
that person shall not be treated as responsible for that information in so far as it is stated in the document to form part of the listing particulars for securities of any other of those companies.'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 74.

Mr. Spicer: These are two technical amendments. They are designed to ensure that stock exchange rules are complied with in the drafting of prospectuses.

Amendment agreed to.

Amendment made: No. 74, in page 55, leave out lines 14 to 17 and insert—
`responsible" means responsible for the purposes of Part IV of the 1986 Act and "responsibility" shall be construed accordingly.'.—[Mr. Michael Spicerr.]

Schedule 11

TAXATION PROVISIONS

Amendments made: No. 87, in page 111, line 37, leave out 'may' and insert 'shall'.

No. 88, in page 112, line 6, at end insert—
'(5A) The trade carried on by a company whose liabilities are extinguished by virtue of section 74(1) of this Act shall, if the company's tax losses are aggregated and apportioned by virtue of sub-paragraph (2) above, be treated for the purposes of giving any relief under the Corporation Tax Acts in respect of the losses so apportioned as being, and having at all times been, the trade carried on by the successor companies to which the losses are apportioned.'.—[Mr. Lang.]

Clause 89

DIRECTIONS FOR PRESERVING SECURITY OF ELECTRICITY SUPPLIES ETC

Mr. Malcolm Bruce: I beg to move amendment No. 173, in page 60, line 39, at end insert—
'((2)) (1) The Secretary of State shall lay before each House of Parliament additional directions for the purpose of—

(a) preserving the security of building or installations used for, or for purposes connected with, or arising from the generating of nuclear power;
(b) mitigating the effects of any civil emergency that may occur as a result of the generation of nuclear power or any matters connected with or arising from the generation of nuclear power.
(2) in setting the directions under ((2)) (1) above the Secretary of State shall consult with the relevant local


authority; with the corresponding health authority or board and with representatives of police, fire and ambulance services.
(3) "relevant local authority" in ((2)) (2) above means the local authority in whose area the building or installation is situated; the local authority through whose area radioactive material may be transported and the local authorities whose area is within 25 miles of the building or installation.
(4) personnel provided for the security of a building or installation under this subsection to prevent terrorist or other attack shall be the responsibility of the the Secretary of State and shall not be provided by firms providing private security services whether employed by the licence holder or any other body or person.'.
The amendment specifically relates to the issues of security and safety at nuclear installations following privatisation. That has been referred to in previous debates and is an important issue. The amendment addresses several specific points.
The first part of the amendment is concerned with the security of buildings and installations associated with the generation of nuclear power. It then deals with mitigating the effects of an emergency. It provides for the co-ordination of an emergency plan with the relevant local emergency services and the notification of local authorities within a 25-mile radius of the building or installation. The final part deals with the security services associated with protecting nuclear installations against terrorist attack and requires that the provision of such security shall be the responsibility of the Secretary of State and shall not be sub-contracted to private security firms.
United Kingdom provision for the security of installations and for nuclear emergencies is not nationally co-ordinated or agreed, or well publicised. Nor does it compare favourably with nuclear installations in other countries. The requirement on nuclear power station operators is concerned only with on-site security and an evacuation planning distance of 3·5 km. Clearly, that does not take account of the possible implications of a significant fall-out of radioactivity. I have been advised that the evacuation distance is 16 km in the United States, 20 km in Finland, 10 km in Germany and between 12 and 15 km in Sweden. Only Mexico operates a smaller radius than we do, at 3 km, and the British Government should not be particularly proud of being marginally better than Mexico.
The main problem is caused by the lack of overall guidelines. It is left to each individual installation. There is no general understanding among the emergency or neighbouring authorities of exactly what is required. I am advised that Somerset county council has taken steps to ensure that there is a well-publicised plan for emergency evacuation of its nuclear installations and that it is available to the public. That is a desirable example which could usefully become the basis for the norm. It has happened only because the county council has initiated such a proposal and because it has managed to secure the voluntary co-operation of the authorities at Hinkley Point. To be fair, they get a good deal of criticism. The fact that they have co-operated is welcome.
The amendment seeks to make it a statutory requirement for this type of plan to be in operation in every circumstance and to make specific proposals for the involvement of the relevant authorities.
It should go without saying not only that there should be a plan, but the emergency services, which are likely to

be most immediately affected in the neighbourhood, should be consulted in the formulation of the plan and fully informed about what the plan is. The fact that that is not the case is a matter for considerable alarm and shows unjustified complacency. No matter how good we may feel the safety and performance record of British installations is, we cannot rule out human error and the fact that there could be an accident. Indeed, there have been sufficient minor incidents—fortunately, in most cases, minor—to make it clear that we must have much better provisions and contingency arrangements for preparing for the possibility of a major disaster.
I do not wish to detain the House longer than is necessary, because some of the arguments have been covered when discussing previous amendments. I believe, however, that the amendment is more specific than the previous ones and shows how we should deal with the problem.
9 pm
I make no secret of the fact that one reason why I have been a persistent and long-term critic of the nuclear power industry has been that, from the days of the previous Labour Government, it has been a requirement to provide armed police to guard nuclear power installations. That begins to bring into question civil liberties. Of course, I accept that those installations are targets for terrorism and need to be protected, but I believe that the House should consider how that protection will continue when the nuclear installations have been transferred to the private sector. That is not just idle speculation. A number of private security agencies are involved in the surveillance of people connected with or critical of the nuclear industry. It is a specific concern of mine that such a body as Zeus Security Consultants, now known as Securipol, could possibly be charged with actually carrying out the protection of those installations. If that were the case, it would effectively mean privatising not just a significant and important policing operation, but an armed policing operation. [Interruption.] The Government may want to privatise the police. However, I believe that we are in dangerous waters if we are suggesting that private nuclear power station operators should be free to contract with private security services to protect those installations. We could be faced with the possibility of a private company providing armed police and using security and surveillance methods that are more associated with counter-espionage than with normal policing operations.
It is no secret that this issue has been raised previously, but I do not apologise for mentioning it again. A couple of months ago my right hon. Friend the Member for Yeovil (Mr. Ashdown) and others tabled an early-day motion drawing attention to the involvement of Lord Chalfont in just one of those agencies. It remains the view of my right hon. Friend and my colleagues that being chairman of the Independent Broadcasting Authority is incompatible with being an active director of a company that carries out what I believe are rather unsavoury security and surveillance operations. Evidence—as recently as last week on Channel 4—has shown that the methods of operation of such companies are extremely dubious.
There have been a number of revelations in the House about our state security services and their failings, but the idea that we should be licensing and, indeed, providing a market for private organisations of this character to be able to develop and expand is unacceptable.
I hope that the Minister can assure us that the security of nuclear installations in the private sector will remain the responsibility of the Secretary of State. If any armed personnel are involved in the protection of those installations—which presumably will continue to be necessary, as that has been the case for at least the past 15 years—they should be employees of the state and not of any private organisation.
The amendment covers a number of different, although relevant and related matters. Do the Government propose to bring forward co-ordinated strategic plans for dealing with any emergency at a nuclear installation, dealing with appropriate evacuation procedures and informing the public and the relevant authorities, especially the emergency services and the local authorities?
If the Minister does not agree to the notification of a 25-mile radius, will he say what kind of evacuation radius the Government think appropriate and how far around it the relevant emergency services and authorities should be involved?
I am prepared to accept that the amendment is open to interpretation, but we need to know more than we have been able to discover so far from the Minister. We cannot simply allow the public to accept assurances from the industry—they will not accept them in any case—that we are much safer and better at operating nuclear power stations than are any of our competitors in any other countries and that we do not require further safety procedures. That is the current state of affairs.
Before the installations are transferred into the private sector we need a clearer statement on what the Government propose to do about emergency and evacuation procedures involving the relevant authorities. I hope the Minister can also give me an assurance that any armed security personnel involved at any nuclear installation will be directly accountable to the Secretary of State and through him to this House.

Mr. Hardy: Many of the security firms pay very poor wages and I am not suggesting that Lord Chalfont is subject to such wages. I have heard of people on £1·50 an hour—that is reason enough to suggest that Lord Chalfont is not included in that particular group. However, there are social dangers in giving people so little money. I am worried if such firms recruit people on a part-time, casual basis. It might be profitable for employers to leave us in a state of dependency on that sort of casual labour, but that is almost as questionable as some areas of the black economy that are causing concern. The Minister needs to give the House some assurances about that.
I know it is fashionable to talk about the modern bugging to which the hon. Member for Gordon (Mr. Bruce) referred a moment ago. Such bugging may provide massive profits for technologically advanced security firms. I am chiefly concerned about the people who will run the security of privatised nuclear power stations, perhaps for many years to come. For us to be dependent on such outfits gives us cause for concern and may well create a nasty taste in the mouth.

Mr. Michael Spicer: The nuclear installations inspectorate, through its licensing powers under the Nuclear Installations (Amendment) Act 1965, already requires that nuclear generators draw up emergency plans to deal with any nuclear accidents in full consultation with the relevant local authorities and emergency services.
The lack of formal responsibility on local authorities to produce emergency plans for nuclear installations of the kind that exist under the Control of Industrial Major Accidents Hazards Regulations for hazardous chemical sites has been noted by my Department. It has been decided to deal with this by making use of powers available to the Health and Safety Commission and by placing a legal requirement on local authorities to prepare the kind of integrated off-site plans for licensed nuclear sites for which the hon. Gentleman has properly called.
The House may like to note that the intention is to go beyond the normal requirements for reference accidents. which is the basis for the existing CIMAH regulations. In the case of nuclear sites, the off-site plans will be required to address the availability of contingency plans to provide for a capability to deal with nuclear accidents which have more widespread effects than the detailed site and off-site plans are designed to cater for. I hope that the hon. Gentleman will be reassured on that point, to which his amendment is appropriately addressed. Legislative help is on the way regarding the integration of plans.
The power proposed in paragraph (IA) of the amendment is already covered by clause 89(1)(a) which enables the Secretary of State to give directions about the security of nuclear power stations. That is a recurring theme of my response to the hon. Member for Gordon (Mr. Bruce). However, it would be quite inappropriate for the Secretary of State to undertake wide consultations on matters involving counter-terrorist measures because it would be impossible to preserve the confidentiality of the proposed measures. For that reason, the Secretary of State will have the discretion not to lay directions before Parliament if that would be against the interests of national security. The hon. Member for Gordon conceded the vital importance of preserving power stations from any potential attack by terrorists.
I shall turn to the point made by the hon. Member for Gordon—addressed by the hon. Member for Wentworth (Mr. Hardy)—that in his view, and this was mentioned in the amendment, there should be no role for private security companies. We cannot accept that. Security matters are the responsibility of those running the power stations, with the proviso that the Secretary of State has the capability to make directions. That fall-back exists throughout the clause; in fact the purpose of the clause is to give him ultimate responsibility to make directions. We do not see why it should not be possible for those with responsibility for security of power stations to use private security contractors should they wish to do so.
The hon. Member for Wentworth mentioned low wages. The headquarters of one of the largest security companies in the country—Group 4 Total Security—is in my constituency. Therefore, I am aware of the industry's structure, benefits and problems. However, I cannot give the assurances about low levels within the industry which he seemed to seek. Those are a matter for negotiation between the companies and their employees. However, I agree that it is extremely important to maintain the highest standards within those companies, particularly when vetting personnel.

Mr. Hardy: Does not the Minister recognise that if a security company seeks to behave responsibly, pay reasonable wages, vet and insure its employees properly and do all that a model employer should, it is likely to be outbid by a firm that sticks up notices—of the sort that I


have seen in jobcentres—offering part-time employment for wretchedly low wages, has no capacity for the proper supervision of its workers, and does nothing more than bank its own large profits?

Mr. Spicer: If that is the case, such companies would be extremely short sighted, because they will put the security of their businesses at risk by employing cowboy operators of the kind suggested by the hon. Member for Wentworth (Mr. Hardy). Therefore, it is sensible for anyone employing contractors for security to ensure they employ those of the highest quality. No doubt, as a result, they will pay them properly for their services.
I concede the point made by the hon. Member for Wentworth that it is extremely important that companies should operate properly. However, we do not want to pass legislation to prevent nuclear power operators from using private contractors should they wish to do so. However, I stress the proviso that the Secretary of State retains—through the operations of the clause—powers of direction and therefore of ultimate responsibility for security.
On the basis of that explanation, I hope that the hon. Member for Gordon will withdraw the amendment.

Mr. Malcolm Bruce: I am still worried about the Minister's failure to reply to one or two points. Those who are involved with or concerned about the safety of nuclear installations—local authorities, for example—are less than happy about the lack of a clear agreed national guideline, and they are still pressing the Department for one. I can genuinely understand—although I do not share this view —that the Government may believe that negotiating with the local authorities and emergency services and notifying the public who live near nuclear installations about evacuation and emergency procedures might create alarm. Against that, however, too many people who live near the installations have no idea of what they are supposed to do in an emergency and no chance of finding out if there is one. Given that a major disaster occurred a few years ago —admittedly, and for this we are grateful, not in this country—I believe that the public would prefer the Government to be more honest and to encourage more discussion of this matter. They would regard it as a greater reassurance——

Mr. Michael Spicer: The hon. Gentleman is right to pull me up for not answering the point about the 3 km evacuation areas. That distance is not a hard and fast standard. The authorities frequently engage in much wider areas for evacuation exercises. I have taken part in an exercise that covered a much wider area. I can offer the hon. Gentleman that assurance.

Mr. Bruce: I am grateful for that assurance. Although I specifically referred to the involvement of local services in an area up to 25 miles away, that is not the point at issue. I accept that there may be reasons for variations in all sorts of circumstances. The lack of a national agreed scheme, however, gives rise to concern. Each installation must make its own plans; those plans are variable, and I am less and less convinced from the evidence made available to me that they are all good and that local authorities and the people living in these areas are adequately informed and involved in the planning process.
I do not want to tempt providence, but if there were a serious accident in a British nuclear installation, the Government would be found wanting for not having ensured that enough information was given to the public who live in these areas.
The final point to which the Minister did not respond was my request for an assurance that any armed surveillance that might be required in these installations would be carried out by personnel who were accountable to the Secretary of State. Personal preferences apart, I can accept a legitimate role for private security companies in the security of nuclear installations, but I cannot readily accept the deployment of armed personnel who work in the private sector. It is most unfortunate that the Minister could not give me the assurance that I sought.
I cannot claim to be particularly happy with the Minister's response. If he cannot give me any firmer assurances, I shall withdraw the amendment, but only on the understanding that the issue will be raised again in another place——

Mr. Michael Spicer: I understand—if I am wrong, I shall publicly correct myself—that at present only the Atomic Energy Authority police in nuclear installations have the right to carry arms. That right was given them by legislation and will not apply to private companies.

Mr. Bruce: That was a helpful intervention and I shall not pursue the point further. I have made my point forcefully and clearly. I still believe that the Government should do more, and this matter will come up again in another place. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 12

NUCLEAR LIABILITIES: FINANCIAL ASSISTANCE

Mr. Alan W. Williams: I beg to move amendment No. 162, in page 113, line 19 at end insert—
'(4) There shall be no grants payable under this Schedule save for expenditure in respect of extra costs that could not have been foreseen by the person concerned as at the date the Act takes effect.'.
Schedule 12 allows the Secretary of State to make grants or loans to the privatised industry for reprocessing nuclear waste, for storage or disposal of waste or for decommissioning nuclear power stations. The schedule seems to be open-ended in that all the bills for waste and decommissioning could be passed to the Government by the privatised industry. The critical phrase in the amendment is
extra costs that could not have been foreseen by the person concerned
We are talking about grants and loans up to £2·5 billion and those could be renewed by order up to £1 billion at a time. We know that the costs at the end of the nuclear cycle could be quite heavy. The CEGB has reserves of about £3 billion set aside to meet those costs. The thermal oxide reprocessing plant project will cost £1·5 billion and the decommissioning cost for British Nuclear Fuels installations is about £4·5 billion. That has increased tenfold in the past year.
The decommissioning costs of nuclear power stations are guesswork at the moment. The Government's guess of the cost is about £300 million. This year is the 10th anniversary of the disaster at Three Mile Island and


already over $1 billion have been spent trying to clean up that mess. The £300 million that I have mentioned is a minimum figure, but the true cost could be as high as £2 billion per nuclear reactor. There are nine Magnox reactors and seven advanced gas-cooled reactors. That means that 16 nuclear power stations have to be decommissioned. The minimum bill for that is £5 billion, but it could be as high as £30 billion.
The cost of disposing of waste is also the subject of guesswork. We do not know the cost of disposing of intermediate-level waste, and the technologies for disposing of high-level waste have not yet been developed. In Committee we talked about a figure of £4 billion, but the Government did not provide any figure.
As I have said, it is clear that the schedule is open ended and all the bills could be passed to the taxpayer. We could have the intolerable situation of the privatised industry being allowed to make a profit and passing the big bills at the end of the nuclear cycle to the taxpayer. In Committee the Minister told us that the provisions referred to unforeseen costs. I have gone minutely through the schedule and can find no mention of unforeseen costs.
The Government need to specify exactly what costs they expect at the end of the cycle. They should specify the foreseen costs and the unforeseen costs. That should be done in the interests of would-be shareholders in the privatised industry and in the interests of taxpayers, the electorate, whose industry is being privatised.
We know that there is terrific concern about these issues in the City and the industry. In a newspaper article a month ago, it was pointed out that the electricity sell-off could flop over the nuclear waste issue. The article said that John Bates, the managing director-designate of National Power, which will have responsibility for nuclear power, had suggested that a public chest should be set up to carry the costs of decommissioning. The CBI is so concerned about the problems at the back end of the cycle that it does not want nuclear power to be privatised.
The purpose of our amendment is to make the Government pin down what costs will be covered by the schedule. We feel that it would be only costs that are not foreseen by the directors of the privatised industry. That was the spirit of the discussion that we had in Committee, and we are asking the Government to put into words the spirit of their reply in Committee. The Government cannot but accept the amendment. They gave us the message that the schedule was meant to cover unforeseen costs. Therefore, not only my hon. Friends but the Government must accept the amendment.

Mr. Hardy: I shall not make a long speech, although this is a serious matter. It is a pity that only two Conservative Back Benchers are here to listen to the essential contribution made by my hon. Friend the Member for Carmarthen (Mr. Williams). I shall repeat a little more briefly the arguments that I advanced in Committee. Conservative Members do not seem to understand that change is accelerating. For example, in the last decade we have seen an intensification of terror in many parts of the world. In the past 15 years, the arrangements and procedures of this building have changed dramatically in response to terror and violence. In 1979, violent crime reached its then highest recorded level. In the decade since then, although the Government have made combating crime their priority, that level has at least doubled.
With this acceleration, with all the other problems that we face, with the sheer encouragement of greed and the infliction of hopelessness on young people—in this country and in others—how a sensible Government can embark on a 100-year policy with an overwhelming commitment to greed and private ownership, a diminution of state responsibility and disregard of the realities of change, I do not know. In due course, our generation will be accused of having taken leave of its senses. I am pleased that some Conservative Members are here for the debate, but it is of such an enormous and historic dimension that this matter should be debated more fully and freely rather than being witnessed by a few silent Members.
My hon. Friend has done us a great service. He has pointed to the economic realities, but the Government should consider the social realities as well. They should ask whether the growing levels of inflation and the increasing gravity of our economic condition make it possible for us to enter into a 100-year agreement. We may find ourselves unable to afford that agreement in less than half that time.

Dr. Kim Howells: There are many unknowns about decommissioning, such as those of technology. Another unknown is insurance. I understand that £20 million is talked about for that, but that is infinitesimal in terms of the effect on a community which experiences any signs of nuclear activity. Near my constituency a pressurised water reactor is to be built at Hinkley Point. If something happens at Hinkley Point, we shall be in big trouble economically and domestically. Besides the fact that we shall all have to run for it, such an incident will have a dreadful effect upon the local economy. Who will pay for that?
One of the most critical moments in the life of any reactor—this is the result of any analysis—is when it becomes decommissioned. That is the moment when we start moving radioactive material from a controlled point, from a nuclear reactor. We have all seen the glossy publications that have been produced by the CEGB, which set out the three stages of nuclear decommissioning. The drawings of the first stage show a nuclear station. In the second set of drawings there are fewer buildings around the nuclear station. In the third stage, pictures are drawn of cows grazing on the site of the former nuclear reactor. That is nonsense.
As I understand it, we are talking of a time scale of between 100 and 500 years. I am assuming that cows will still be supplying our milk 500 years on. There is no talk, however, of economics. What happens if there is even a minor accident at a nuclear station during the decommissioning process? My hon. Friend the Member for Carmarthen (Mr. Williams) has drawn attention to the article which appeared in the colour magazine of The Observer on Sunday. It informed us that the decommissioning or rescue process for Three Mile Island has already cost four times the amount that it cost to construct. Who will pay when it comes to an accident? Will it be the Government or the private owner of the nuclear power station? I will tell the House who will pay. The Government will pay in the end, which means that the customer will pay. The Government are ghettoising the nuclear sector. They are trying to pretend that it will become part of a great new privatised industry. In fact, they are ringfencing it. If anything goes wrong, the public


will have to pick up the tab, and it will be a considerable tab. The damage to the economy will be irreversible in any area where something goes wrong.

Mr. Keith Mans: Does the hon. Member agree that under the present system, in which everything is nationalised, all decommissioning costs will automatically be picked up by the public? Within the system are stations that were ordered by the Labour Government.

Dr. Howells: I am grateful to the hon. Gentleman for that intervention. It allows me to say that if there is a benefit to be derived from the nuclear generation of electricity, as the Government say there is, we pick up the profit. However, if something goes wrong in future, we shall not pick up a profit. In addition, we shall have to pay for the damage. Where is the sense in that? I hope that the Minister will be comprehensive in his reply.

Mr. Michael Spicer: It seems that the hon. Member for Wentworth (Mr. Hardy) does not like the 100-year idea. He thinks that it is a long time.

Mr. Hardy: I do not like it within a privatised context.

Mr. Spicer: In any event, the hon. Gentleman does not like the 100-year idea.
Were the third stage of decommissioning to be changed by regulation in such a way that meant that it could not be anticipated, that would be cause for public expenditures to be incurred. We had a long debate in Committee on this issue, during which we made clear our policy. We do not think it necessary to put into the Bill the provision that has been suggested by the hon. Member for Carmarthen (Mr. Williams). That would be unnecessary. It would provide a tremendous bonanza for lawyers. Everyone would come forward to argue that a particular proposal did not fit within the legislation. We are clear about the policy. The industry, and therefore the consumer, will pay for decommissioning unless something happens that was not capable of being foreseen—such as the regulations concerning the environment being changed—and proper provision could not therefore have been made in the accounts.
The hon. Member for Pontypridd (Dr. Howells) had some fun at the end of his speech about who pays. Either the taxpayer or the consumer pays. We make no bones about the fact that the consumer will pay for decommissioning and it is correct that he should. He will pay in the way that is appropriate, through proper provisions in the accounts and with the appropriate charging being made against those provisions.
In answer to the comment made by my hon. Friend the Member for Wyre (Mr. Mans), the hon. Member for Pontypridd was less than fair in saying that the shareholder would benefit from the industry's profits but the taxpayer would pick up the costs. Because we do not want that to persist, we are making it clear that the schedule will be activated only if there is a change in environmental policies that the industry could not have foreseen. To overcome the reservations that the hon. Gentleman put to the House, I give the assurance that we shall use these powers for England and Wales where the environmental conditions and regulations are changed.
I hope that the hon. Member for Carmarthen will not feel it necessary to press the amendment. I give him the assurance that that is the Government's policy and we intend to stick to it.

Mr. Alan W. Williams: Where is it said in the schedule that the measure will be activated only in unforeseen circumstances? I understand from my reading of the Bill that the schedule can be activated at any stage by any Secretary of State whenever the industry asks for the money, and in that way it could be used to pay for the whole thing.

Mr. Spicer: I am setting out the Government's policy. The Government would not activate the schedule unless there were unforeseen changes. Therefore, the hon. Gentleman's amendment is not necessary.

Mr. Morgan: The Under-Secretary of State asked my hon. Friend the Member for Carmarthen (Mr. Williams) not to press the amendment to the vote. I assure the hon. Gentleman that I will press it.
We are reaching the closing stages of the Report stage and we are still wondering about its purpose. It is not to keep hon. Members from their dinners. It is certainly not to keep the Secretary of State from his—nothing keeps him from his dinner, either here or in Moscow. All of us who have had to work through the Committee and Report stages are interested in what the Government mean when they give an undertaking in Committee. Do they meet it on Report?
We have tabled amendment No. 162 in precise words to meet the exact requirements set out in Committee by the Under-Secretary of State. We originally tabled an amendment which included the word "foreseeable", but the hon. Gentleman said that he was not happy with it and that it was a little unfair, but he thought that the word "foreseen" was fair. We took out the word "foreseeable" and inserted "foreseen".
The Under-Secretary of State had another objection in Committee. He said that the amendment was not precise in terms of who would be covered by it. We made it precise and inserted "by the person concerned", which is legal language for National Power, the successor company to the nuclear part of the CEGB.
If a Report stage means anything, and if the word of a Minister in Committee means anything, I hope that the Minister will say that amendment No. 162 is satisfactory. However, from his remarks, I understand that he will not take that view. I do not know what that says about the Minister's attitude to undertakings he has given. What does he think is the purpose of Report, and does he realise that this Chamber is a Parliament of the British people?
If the Minister does not agree to the amendment, it means that, having put on a little show of bravado in Committee, he is now saying that he wants some form of riskless private capitalism because one cannot privatise the industry with the nuclear component intact on any other terms. What other industry would have the cheek to ask for all of its unforeseen risks to be covered by the taxpayer? What other industry would say that, although it has capital and reserves, they must not be touched if one of its major waste processors should suddenly increase its charges? Can the Minister name any other industry that exists in the private sector on the terms that if it has any problems with waste disposal the Government will ensure that the share capital owners and the people who have


gone in for great risk taking in equity investment or the excitement of buying shares will have no problems because the taxpayer will pick up the tab?
There is another peculiar aspect, similar to the peculiarity of the nuclear levy. The Government have said that it is wise to have insurance against the Organisation of Petroleum Exporting Countries or another miners' strike. The Government say that the insurance of a second source of fuel is needed as cover against any sudden eventualities and that that makes sense. But what other industry can the Minister name which has instructions to spend more than £6 billion on a second source of fuel to cover it against an eventuality such as the possibility of another OPEC monopoly trebling the price of oil or another miners' industrial dispute? Other industries believe that if one owns shares, those shares and reserves are at risk to cover eventualities such as that. The merchant bankers have told the Government that they must realise that they cannot sell nuclear power on such terms. They have also told them that, knowing the problems of waste disposal with nuclear power, there is no possibility of selling the industry with its nuclear power component intact because the risks are far too great.
For the past 30 years, the nuclear power industry has existed as a big lie. We were told in 1957 that it knew how to solve the problem of its nuclear waste disposal or that, if it did not know this year, it would know next year. Thirty years later, the industry still does not know how to dispose of its nuclear waste. At the Hinkley Point public inquiry the CEGB was asked how it would dispose of the spent fuel rods from Hinkley Point, but it could not give an answer—32 years after the beginning of civil nuclear power in this country.
The Government have the cheek to tell us that the nuclear power industry is clean relative to coal because it does not cause the problems of the greenhouse effect. The coal industry has serious environmental problems, but they are soluble. For the nuclear power industry, we have been waiting 32 years to find out what they are. The difference can be summarised as follows. When one installs an admittedly very expensive but known technology, which has been in use in Japan for more than 15 years, in which limestone scrubbers are put in the chimneys of coal-fired power stations, one produces a useful building product—plaster—for which there is an immediate sale. I cannot think of any comparable product in the nuclear Industry. Nuclear waste has to be buried under the ground and the sites of old power stations have to be covered with hundreds of feet of concrete for more than 100 years. I shall summarise it briefly. The back end of the nuclear power fuel cycle gives us Nirex; the coal cycle gives us artex.
The real problem that is causing the Government to insist that the nuclear power station component remains alive is that the Prime Minister has a talismanic faith in the nuclear power industry. She wears her talisman around her neck. After General Galtieri there came Arthur Scargill and she believes that she conquered him. I am told that following a couple of Johnnie Walkers in the evening she sometimes believes that she won back the Falklands by dropping a nuclear power station on Buenos Aires.
The right hon. Lady's simple belief must be brought to an end. The economics of nuclear power have run their generational cycle and the time has come for us to return to a sensible policy to meet our energy and electricity requirements. The private sector has plainly told the

Department of Energy that it will not undertake the risks of nuclear power, so poor old muggins, the taxpayer, will have to do the job again.

Question put, That the amendment be made:—

The House divided: Ayes 191, Noes 249.

Division No. 150]
[9.45 pm


AYES


Abbott, Ms Diane
Foster, Derek


Adams, Allen (Paisley N)
Foulkes, George


Allen, Graham
Fraser, John


Alton, David
Fyfe, Maria


Anderson, Donald
George, Bruce


Archer, Rt Hon Peter
Godman, Dr Norman A.


Armstrong, Hilary
Golding, Mrs Llin


Ashdown, Rt Hon Paddy
Gordon, Mildred


Ashley, Rt Hon Jack
Gould, Bryan


Ashton, Joe
Grant, Bernie (Tottenham)


Banks, Tony (Newham NW)
Griffiths, Nigel (Edinburgh S)


Barnes, Harry (Derbyshire NE)
Griffiths, Win (Bridgend)


Barron, Kevin
Grocott, Bruce


Battle, John
Hardy, Peter


Beckett, Margaret
Harman, Ms Harriet


Bell, Stuart
Hattersley, Rt Hon Roy


Benn, Rt Hon Tony
Haynes, Frank


Bennett, A. F. (D'nt'n &amp; B'dish)
Healey, Rt Hon Denis


Bermingham, Gerald
Heffer, Eric S.


Bidwell, Sydney
Henderson, Doug


Blair, Tony
Hinchliffe, David


Boateng, Paul
Home Robertson, John


Bray, Dr Jeremy
Hood, Jimmy


Brown, Ron (Edinburgh Leith)
Howarth, George (Knowsley N)


Bruce, Malcolm (Gordon)
Howell, Rt Hon D. (S'heath)


Buchan, Norman
Howells, Dr. Kim (Pontypridd)


Buckley, George J.
Hughes, John (Coventry NE)


Caborn, Richard
Hughes, Robert (Aberdeen N)


Callaghan, Jim
Hughes, Roy (Newport E)


Campbell, Menzies (Fife NE)
Hughes, Sean (Knowsley S)


Campbell, Ron (Blyth Valley)
Illsley, Eric


Campbell-Savours, D. N.
Janner, Greville


Carlile, Alex (Mont'g)
Jones, Barry (Alyn &amp; Deeside)


Cartwright, John
Jones, Ieuan (Ynys Môn)


Clark, Dr David (S Shields)
Jones, Martyn (Clwyd S W)


Clarke, Tom (Monklands W)
Kaufman, Rt Hon Gerald


Clay, Bob
Kennedy, Charles


Clelland, David
Kirkwood, Archy


Cohen, Harry
Lambie, David


Coleman, Donald
Lamond, James


Cook, Robin (Livingston)
Leighton, Ron


Corbett, Robin
Lestor, Joan (Eccles)


Cousins, Jim
Lewis, Terry


Cox, Tom
Lloyd, Tony (Stretford)


Crowther, Stan
Lofthouse, Geoffrey


Cryer, Bob
Loyden, Eddie


Cummings, John
McAllion, John


Cunliffe, Lawrence
McAvoy, Thomas


Dalyell, Tam
Macdonald, Calum A.


Davies, Ron (Caerphilly)
McFall, John


Davis, Terry (B'ham Hodge H'l)
McKelvey, William


Dewar, Donald
McLeish, Henry


Dixon, Don
Maclennan, Robert


Dobson, Frank
McWilliam, John


Doran, Frank
Madden, Max


Douglas, Dick
Mahon, Mrs Alice


Duffy, A. E. P.
Marek, Dr John


Dunwoody, Hon Mrs Gwyneth
Marshall, David (Shettleston)


Eadie, Alexander
Martin, Michael J. (Springburn)


Eastham, Ken
Martlew, Eric


Evans, John (St Helens N)
Maxton, John


Ewing, Harry (Falkirk E)
Meale, Alan


Fatchett, Derek
Michie, Bill (Sheffield Heeley)


Faulds, Andrew
Michie, Mrs Ray (Arg'1 &amp; Bute)


Fearn, Ronald
Mitchell, Austin (G't Grimsby)


Field, Frank (Birkenhead)
Moonie, Dr Lewis


Fields, Terry (L'pool B G'n)
Morgan, Rhodri


Fisher, Mark
Morley, Elliott


Flannery, Martin
Morris, Rt Hon A. (W'shawe)


Flynn, Paul
Morris, Rt Hon J. (Aberavon)


Foot, Rt Hon Michael
Mowlam, Marjorie






Mullin, Chris
Skinner, Dennis


Murphy, Paul
Smith, Andrew (Oxford E)


O'Brien, William
Smith, C. (Isl'ton &amp; F'bury)


O'Neill, Martin
Smith, Rt Hon J. (Monk'ds E)


Orme, Rt Hon Stanley
Snape, Peter


Patchett, Terry
Steinberg, Gerry


Pendry, Tom
Stott, Roger


Pike, Peter L.
Taylor, Mrs Ann (Dewsbury)


Powell, Ray (Ogmore)
Taylor, Matthew (Truro)


Prescott, John
Thompson, Jack (Wansbeck)


Quin, Ms Joyce
Turner, Dennis


Radice, Giles
Vaz, Keith


Randall, Stuart
Wall, Pat


Redmond, Martin
Wallace, James


Reid, Dr John
Walley, Joan


Richardson, Jo
Welsh, Andrew (Angus E)


Robertson, George
Welsh, Michael (Doncaster N)


Robinson, Geoffrey
Williams, Rt Hon Alan


Rogers, Allan
Williams, Alan W. (Carm'then)


Rooker, Jeff
Winnick, David


Ross, Ernie (Dundee W)
Wise, Mrs Audrey


Rowlands, Ted
Worthington, Tony


Ruddock, Joan



Salmond, Alex
Tellers for the Ayes:


Sedgemore, Brian
Mr. Robert N. Wareing and Mr. Allen McKay.


Sheerman, Barry



Sheldon, Rt Hon Robert



NOES


Adley, Robert
Chope, Christopher


Aitken, Jonathan
Clark, Sir W. (Croydon S)


Alexander, Richard
Colvin, Michael


Alison, Rt Hon Michael
Conway, Derek


Allason, Rupert
Coombs, Anthony (Wyre F'rest)


Amess, David
Coombs, Simon (Swindon)


Amos, Alan
Cope, Rt Hon John


Arbuthnot, James
Couchman, James


Arnold, Jacques (Gravesham)
Cran, James


Ashby, David
Critchley, Julian


Aspinwall, Jack
Curry, David


Atkins, Robert
Davies, Q. (Stamf'd &amp; Spald'g)


Atkinson, David
Davis, David (Boothferry)


Baker, Rt Hon K. (Mole Valley)
Day, Stephen


Baker, Nicholas (Dorset N)
Devlin, Tim


Baldry, Tony
Dicks, Terry


Batiste, Spencer
Dorrell, Stephen


Beaumont-Dark, Anthony
Douglas-Hamilton, Lord James


Bellingham, Henry
Dover, Den


Bendall, Vivian
Dunn, Bob


Bennett, Nicholas (Pembroke)
Durant, Tony


Benyon, W.
Eggar, Tim


Bevan, David Gilroy
Emery, Sir Peter


Biffen, Rt Hon John
Evennett, David


Blackburn, Dr John G.
Fairbairn, Sir Nicholas


Body, Sir Richard
Fallon, Michael


Bonsor, Sir Nicholas
Favell, Tony


Boscawen, Hon Robert
Field, Barry (Isle of Wight)


Boswell, Tim
Finsberg, Sir Geoffrey


Bowden, Gerald (Dulwich)
Fishburn, John Dudley


Bowis, John
Fookes, Dame Janet


Braine, Rt Hon Sir Bernard
Forman, Nigel


Brandon-Bravo, Martin
Forsyth, Michael (Stirling)


Brazier, Julian
Fox, Sir Marcus


Bright, Graham
Franks, Cecil


Brooke, Rt Hon Peter
Freeman, Roger


Brown, Michael (Brigg &amp; Cl't's)
Fry, Peter


Browne, John (Winchester)
Gale, Roger


Bruce, Ian (Dorset South)
Gardiner, George


Buchanan-Smith, Rt Hon Alick
Garel-Jones, Tristan


Buck, Sir Antony
Gill, Christopher


Budgen, Nicholas
Glyn, Dr Alan


Burns, Simon
Goodlad, Alastair


Burt, Alistair
Goodson-Wickes, Dr Charles


Butcher, John
Gow, Ian


Butterfill, John
Greenway, Harry (Ealing N)


Carlisle, Kenneth (Lincoln)
Greenway, John (Ryedale)


Carrington, Matthew
Gregory, Conal


Carttiss, Michael
Griffiths, Sir Eldon (Bury St E')


Chalker, Rt Hon Mrs Lynda
Griffiths, Peter (Portsmouth N)


Chapman, Sydney
Grist, Ian





Ground, Patrick
Morrison, Sir Charles


Grylls, Michael
Morrison, Rt Hon P (Chester)


Hague, William
Moss, Malcolm


Hamilton, Hon Archie (Epsom)
Moynihan, Hon Colin


Hamilton, Neil (Tatton)
Neale, Gerrard


Hampson, Dr Keith
Nelson, Anthony


Hanley, Jeremy
Neubert, Michael


Hargreaves, A. (B'ham H'll Gr')
Nicholls, Patrick


Hargreaves, Ken (Hyndburn)
Nicholson, David (Taunton)


Harris, David
Nicholson, Emma (Devon West)


Hayes, Jerry
Norris, Steve


Hayhoe, Rt Hon Sir Barney
Onslow, Rt Hon Cranley


Hayward, Robert
Oppenheim, Phillip


Heddle, John
Page, Richard


Heseltine, Rt Hon Michael
Paice, James


Higgins, Rt Hon Terence L.
Patnick, Irvine


Hill, James
Patten, John (Oxford W)


Hogg, Hon Douglas (Gr'th'm)
Pawsey, James


Hordern, Sir Peter
Peacock, Mrs Elizabeth


Howard, Michael
Porter, David (Waveney)


Howarth, Alan (Strat'd-on-A)
Portillo, Michael


Howarth, G. (Cannock &amp; B'wd)
Powell, William (Corby)


Howell, Rt Hon David (G'dford)
Price, Sir David


Hughes, Robert G. (Harrow W)
Raffan, Keith


Hunt, David (Wirral W)
Raison, Rt Hon Timothy


Hunt, John (Ravensbourne)
Rathbone, Tim


Hunter, Andrew
Redwood, John


Hurd, Rt Hon Douglas
Rhodes James, Robert


Irvine, Michael
Riddick, Graham


Irving, Charles
Rifkind, Rt Hon Malcolm


Jack, Michael
Roberts, Wyn (Conwy)


Janman, Tim
Rossi, Sir Hugh


Jessel, Toby
Rost, Peter


Johnson Smith, Sir Geoffrey
Rumbold, Mrs Angela


Jones, Robert B (Herts W)
Ryder, Richard


Kellett-Bowman, Dame Elaine
Scott, Nicholas


Key, Robert
Shaw, David (Dover)


King, Roger (B'ham N'thfield)
Shaw, Sir Giles (Pudsey)


Kirkhope, Timothy
Shaw, Sir Michael (Scarb')


Knapman, Roger
Shelton, Sir William


Knight, Greg (Derby North)
Shephard, Mrs G. (Norfolk SW)


Lamont, Rt Hon Norman
Shepherd, Colin (Hereford)


Lang, Ian
Shersby, Michael


Latham, Michael
Smith, Sir Dudley (Warwick)


Lawrence, Ivan
Smith, Tim (Beaconsfield)


Lee, John (Pendle)
Speed, Keith


Lennox-Boyd, Hon Mark
Spicer, Sir Jim (Dorset W)


Lester, Jim (Broxtowe)
Spicer, Michael (S Worcs)


Lightbown, David
Squire, Robin


Lloyd, Sir Ian (Havant)
Stanbrook, Ivor


Lloyd, Peter (Fareham)
Stanley, Rt Hon Sir John


Lord, Michael
Steen, Anthony


Lyell, Sir Nicholas
Stern, Michael


McCrindle, Robert
Stevens, Lewis


Macfarlane, Sir Neil
Stewart, Andy (Sherwood)


MacGregor, Rt Hon John
Stewart, Rt Hon Ian (Herts N)


MacKay, Andrew (E Berkshire)
Stradling Thomas, Sir John


Maclean, David
Summerson, Hugo


McLoughlin, Patrick
Taylor, Ian (Esher)


McNair-Wilson, Sir Michael
Taylor, John M (Solihull)


McNair-Wilson, P. (New Forest)
Tebbit, Rt Hon Norman


Malins, Humfrey
Thatcher, Rt Hon Margaret


Mans, Keith
Thorne, Neil


Maples, John
Thurnham, Peter


Marshall, Michael (Arundel)
Townsend, Cyril D. (B'heath)


Martin, David (Portsmouth S)
Tredinnick, David


Mates, Michael
Trotter, Neville


Maxwell-Hyslop, Robin
Waddington, Rt Hon David


Meyer, Sir Anthony
Wakeham, Rt Hon John


Miller, Sir Hal
Watts, John


Mills, Iain
Widdecombe, Ann


Mitchell, Andrew (Gedling)



Mitchell, Sir David
Tellers for the Noes:


Moate, Roger
Mr. Tom Sackville and Mr. David Heathcoat-Amory.


Montgomery, Sir Fergus



Morris, M (N'hampton S)

Question accordingly negatived.

Clause 92

COMPETITION AND RESTRICTIVE TRADE PRACTICES

Mr. Morgan: I beg to move amendment No. 166, in page 62, line 39, leave out paragraph (b).

Mr. Speaker: With this it will be convenient to consider the following amendments:
No. 163, in page 62, line 42, leave out subsection (3).
No. 167, in page 63, line 4, leave out paragraph (b).
No. 157, in schedule 13, page 115, line 21, leave out sub-paragraph (3).
Government amendments Nos. 91 and 75 to 78.

Mr. Morgan: This group of amendments relates, in the main, to restrictive trade practices. They raise the question of just how deeply the Government have thought about whether they have produced a competitive regime, and, if they have produced a competitive regime, whether it will be up to them to regulate it or whether it might be up to the European Community as well. Obviously, there is a fairly fluid boundary between the two jurisdictions on matters relating to competition. It certainly occurs to us, having read the comments made by bodies such as the CBI, that there may well be problems for the Government arising from the regulation, by the EEC, of some of the little peculiarities of this Bill. We are thinking particularly of the nuclear levy. Would the Government have a leg to stand on if someone challenged them on that at the European Court of Justice because they were in breach of article 85 by compelling people to buy more expensive power than they wanted? The CBI made that point and we entirely agree that the Government need to persuade us that if the large industries with the resources——

It being Ten o'clock, further consideration of the Bill stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Electricity Bill may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

As amended, further considered.

Mr. Morgan: The CBI spoke of "the nuclear millstone". It wants to be free of that and the Government must address the matter. Consumers, particularly in the north and in south Wales, could well take the Government to the European Court and challenge them that the north subsidises the south on electricity prices and will do so even more under the Bill because of the increasing burden of the nuclear millstone. Have the Government thought about that?
We wonder how the Government will handle a proposed foreign takeover of any of the area boards or generating boards. Will not the EEC disallow the Government from keeping the essential sinews of the electricity industry, which we believe must remain in British hands? The water industry is in a similar position. If France or any other European country suddenly took a fancy to a British area board, as happened with the water boards, could the Government stop such a foreign takeover, given the strictures on restrictive trade in articles 85 and 92 of the treaty of Rome?

Mr. Michael Spicer: I assure the hon. Gentleman that we have thought about the competitive regime implied in

the Bill. That is, indeed, when we introduced the Bill. It will have a dramatic effect in ensuring competition in the industry in future.
The amendments seek to remove all exemptions to restrictive agreements. We cannot agree to that because there must be some such agreements. The industry could not exist without, for example, agreements on emergency planning or pooling arrangements.
We have had discussions with the Commission on the hon. Gentleman's question about the EEC. We have absolutely no reason to believe that there should be any problems. We are in the forefront of all European countries in providing a competitive regime for the electricity industry. We shall keep the EEC informed about any future developments. On that basis I hope that the hon. Gentleman will withdraw his amendment and that the House will accept the Government amendments in this group.

Mr. Morgan: I shall accept the Government amendments, but not because we are satisfied with the Minister's reply.
In the EEC, if one calls something public infrastructure and treats it as such, one is allowed all manner of exclusions from the impact of articles 85 and 92. However, if one calls something a straight commercial business and says that one wishes to return all EEC loans because one wants to be on a complete commercial footing, as the Government do, one is in trouble. Therefore, many questions must be answered before we can be assured that the EEC will not find it necessary to interfere on a large scale with the industry. The Government have not thought this through.

Amendment, by leave, withdrawn.

Schedule 14

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 91, in page 117, line 32, leave out sub-paragraph (1)(iv).

No. 75, in page 128, leave out lines 11 to 14.—[Mr. Michael Spicer.]

Schedule 15

TRANSITIONAL PROVISIONS AND SAVINGS

Amendments made: No. 76, in page 129, line 22, leave out sub-paragraph (1) and insert—
`(1) Where any application made under section 2 of the Electric Lighting Act 1909 or section 35 of the Electricity (Scotland) Act 1979 is effective on the day appointed for the coming into force of section 33 of this Act—

(a) the application shall have effect as if made under the said section 33 modified for that purpose by the omission of subsections (2) and (2A);
(b) anything done before that day in relation to the application (whether under the said section 2 or 35 or under section 33 or 34 of the Electricity Act 1957) shall have effect as if done under the corresponding provisions of Schedule 8 to this Act, and
(c) the provisions of Part I of this Act shall apply accordingly.'.

No. 77, in page 129, line 43, leave out sub-paragraph (1) and insert—
`(1) Where any application made under section 10(b) of the Schedule to the Electric Lighting (Clauses) Act 1899 is effective on the day appointed for the coming into force of section 34 of this Act—



(a) the application shall have effect as if made under the said section 34 modified for that purpose by the omission of subsection (2);
(b) anything done before that day in relation to the application (whether under the said section 10(b) or under section 32 or 34 of the Electricity Act 1957) shall have effect as if done under the corresponding provisions of Schedule 8 to this Act; and
(c) the provisions of Part I of this Act shall apply accordingly.'.—[Mr. Michael Spicer.]

Schedule 16

REPEALS

Amendment made: No. 78, in page 144, line 45, column 3, leave out lines 45 and 46 and insert 'Section 44.'.—[Mr. Michael Spicer.]

Order for Third Reading read—Queen's and Prince of Wales's consent signified.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move, That the Bill be now read the Third time.
It is probably impossible to present new considerations for the deliberations of the House that have not already been exhaustively discussed at Second Reading, in Committee or on Report. However, I would wish briefly, in order not to detain the House, to emphasise that the Government believe that the deliberations on the Bill have clearly and firmly established the basic propositions on which the Bill was originally commended to the House.
First, we believe that the Bill is in the interests of the electricity industry. It is significant that the industry agrees with our observation. Perhaps the most important consideration from the industry's point of view is that in future the investment needs and other crucial decisions affecting the electricity industry will not be subject to Government or to politicians of any party. That will place the electricity industry in the same position as other industries throughout the United Kingdom. It can only be beneficial that those aspects of investment and other matters are determined by the industry. I believe that that explains the enthusiasm of the people who work in the electricity industry for the prospects that privatisation will bring about.
Secondly, I believe that the Bill has clearly been shown to be in the interests of the consumer. That is central to the difference between the two sides of the House. Whereas the Labour party, and those who support its point of view, believe that if one cannot have perfect competition, one should be satisfied with perfect monopoly, the Government believe that it is possible to introduce substantial elements of competition within the electricity industry, that it is in the interests of the consumer to do so and that the Bill will bring that about.
There will, therefore, be competition in generation, there will be choice for bulk purchasers of electricity and there will be opportunities for exporters, especially for the Scottish electricity industry, which I believe have justified the support for the Bill.
The Bill is especially important for Scotland where the nationalisation of the electricity industry some 40 years ago meant—as do all other forms of nationalisation in Scotland—the loss of control in Scotland to the Government of the day, whichever Government that

might be. One never ceases to be amused, as well as unsurprised, at the inability of the Opposition to understand that argument.
In future the needs of the Scottish electricity industry will be decided by the management of that industry in Scotland, which I believe is of significance. In addition, by the privatisation of the SSEB and the hydro board, we will create two of the largest Scottish companies, which will give a major boost to the development of the Scottish private sector. We will see also exciting opportunities for consumers, employees and financial institutions in Scotland to acquire a significant stake in the industry.
There are fundamental differences between the Government and the Opposition. The Opposition stand for monopoly. They stand for continuing monopoly that they express themselves content with and anxious to preserve. The Opposition also appear to believe that there is a need not for simply a regulatory structure to protect the public interest, but for politicians and for Governments to have a continuing right to interfere in the fundamental decisions affecting this industry, although they have no comparable right in other industries that are crucial to our national economy.
These are crucial issues of principle and I believe that during the debate my right hon. and hon. Friends, who have been concerned with the detail of the Bill, have manifestly shown the desirability of the Bill and, indeed, the benefits that it will bring to the public throughout the United Kingdom. It is on that basis that I happily commend the Bill to the House.

Mr. Blair: As we are preparing to vote on the Third Reading of the Electricity Bill it is instructive to remember the words of the Secretary of State for Industry who, six years ago, moved the Telecommunications Bill to privatise British Telecom. The Secretary of State for Industry then is the Secretary of State for Energy now, the peripatetic right hon. Member for Hertsmere (Mr. Parkinson). I gather he is now occupied as a travelling salesman somewhere in the Soviet Union. At that time he set up what he believed would be the guiding principle in the privatisation of British Telecom. He promised:
It will give customers the choice between different suppliers of apparatus, different suppliers of services and, increasingly, different networks.
It did not do any of those things. He said of British Telecom:
I am convinced that to change British Telecom ownership will bring about a major improvement in BT's accountability.
It has not. Finally, he said.
We offer the millions of BT customers a newly enshrined set of rights"—[Official Report, 18 July 1983; Vol. 46, c. 27–38.]
Tell that to the thousands more who, each year, complain about the standards of service that they receive.
The truth is that every promise that has been made tonight for the Electricity Bill was made in 1983 for the British Telecom Bill. The Government were wrong then and they are wrong now. We have established that for the consumer, contrary to what the right hon. Gentleman has said, there will be no choice of area board, no choice at point of service. There will be little competition ever in this industry and no competition for at least 10 years.
We have shown that the basic security of supply is at risk because, as Mr. Baker said and the Secretary of State


could not deny, it will not be the duty of National Power or PowerGen to keep the lights on after privatisation, although they are the only people who will be able to fulfill that duty of supply.
We have learnt that the area boards with a high proportion of industrial customers will be vulnerable to takeover and bankruptcy if they lose major customers from the system.
We have revealed that the nuclear industry, quite apart from any other section of the fuel industry, will be ring fenced, given special protection against risk and underwritten by a special tax paid for by the consumer and the taxpayer who will still be liable for the costs of decommissioning even after losing the profit from the industry.
We know that the national grid, the transmission system, itself a monopoly to be owned by the area boards, will be privatised although no rational case has been made for its privatisation at any time during our deliberations.
We have exposed the fact that the costs of flotation will be huge and that they may amount to as much as £25 for every household in this country. All that for a privatisation that the people do not want, the nation does not need and that is now incomprehensible in any terms except as a doctrine driven by prejudice.

Mr. Alfred Morris: Is not the Government's whole stance in relation to this Bill reminiscent of Oscar Wilde who said, after the first night of one of his plays, "The play is a great success, but the audience a failure"? Although the Government are convinced by their own propaganda, has not the Bill been overwhelmingly rejected by the electorate and therefore by the consumers?

Mr. Blair: My right hon. Friend is entirely right.
The Government may get their majority tonight in the House, but they have failed miserably to persuade the majority of people in this country that the proposal is good. At the next election they shall pay the penalty for that misjudgment.

Mr. Rost: I congratulate my right hon. and hon. Friends on the courageous manner in which they have introduced this radical Bill and on the skilful manner in which they have handled this complicated and technical reform.
I welcome the opportunity for competition. Evidence already exists of area boards shopping around and contracting or arranging to contract for cheaper electricity than they now pay the CEGB to supply. The east midlands hoard, for example, is already offered cheaper power than it now buys from the CEGB. I welcome the change of heart on the part of the CEGB, which is already having to rethink its energy strategy and abandon its traditional plans of electricity only large coal-fired stations in favour of lower-cost electricity production. It has had to turn to combined cycle gas turbines and it has realised that, in future, it will have to sell electricity in a competitive market.
I welcome the nuclear clause because for the first time, by ring fencing the real cost of nuclear energy, it will concentrate the minds of the nuclear industry, which will have to become competitive if it wishes to have a future unprotected by a subsidy which I regard as transitional. I

welcome the effect that it will have on the coal industry, which will also have to realise that it must improve its competitiveness if it wishes to sell its products. The country will no longer be handicapped by high-cost coal and the high-cost electricity which results from it.
I welcome the opportunities of wider share ownership, particularly employees shareholding, that will result from the legislation. I welcome the opportunities that will come to the new technologies for electricity production, which the CEGB has preferred to ignore and which will produce cheaper power—the clean coal technologies, the combined-cycle gas turbine. Those will exert downward pressure on prices, as distributors have the competitive incentive to source their supplies from lower-cost electricity. I welcome the incentives particularly for the combustion of municipal refuse, which can be used for fuel instead of land fill and causing pollution.
I have only one regret, and one reservation, which is that I hope that my right hon. Friends will look again at the need to increase the powers to oblige privatised production companies to sell off their surplus power stations, of which they are hoarding more than 100 at the moment—most of them near urban areas. These redundant power station sites are ideal for the private producers, who want to provide competition. It is important that those sites should be made available on a competitive basis.
My regret is that the Government have rejected amendments—including my own—that would have strengthened the obligation to produce electricity more efficiently and less wastefully. That is a missed opportunity, which would have encouraged more efficient electricity production, more city combined heat and power district heating, reduced the emissions of greenhouse gas CO, whilst, at the same time, improving energy efficiency and reducing fossil fuel burn.
The United Kingdom has the highest CO2 release of fossil fuel from energy production per head of population in Europe. We burn more coal and, at the same time, we use only one third of what we put into power stations to convert into electricity. We throw away, in the form of hot water, the other two thirds of the fuel—which other countries increasingly use for space heating, so displacing fossil fuel burn. We should also do that.
The Government could have given a lead—I hope that they will reconsider this—in promoting more energy efficiency by reducing the greenhouse gases and, at the same time,. reducing the threat of global warming. I predict that within two or three years, because of international and EEC pressure, and the need to reach agreement to reduce CO2 emissions globally, amendments will be made to the Bill in the form that some of us have suggested. I hope that hon. Members of the other place will look again and attend to this most important matter to strengthen the Bill in a way that will give credit to the Government in the longer term.
I hope that the regulator, when appointed, will prove to be as effective as the regulator of British Gas—the director general of Ofgas. He must be a person of such calibre because his responsibilities will be immense and he will determine whether the Government's proposals for competition succeed or fail.
The Bill offers a long overdue restructuring of the industry. It will offer the opportunities that are desperately needed for competition and innovation. It will provide a better deal for consumers and for industry, which has


complained for far too long about too-high energy costs. It will therefore benefit the economy as a whole. That is why I regard this legislation as far more important than any other privatisation measure that we have introduced over the past decade. Indeed, I regard it as the most significant and radical measure of this Parliament.
In the longer term, this reform will benefit the whole economy and its competitiveness far more than any other measure that we have introduced.

Mr. Eadie: I intend to be brief.
As we have debated the Bill it has emerged that the consumer has been conned by the idea of the privatisation of the electricity supply industry. On any objective analysis of our discussions, it is certain that the consumer will pay more because of the measure. But that is not the end of it: the taxpayer will pay a price too.
It has also emerged in the course of our debates that private capital is not interested in building thermonuclear power stations unless the Government are prepared to give some guarantees. So the Government are presenting private capital with a cheque to try to induce it to build thermonuclear power stations. Only time will tell whether the cheque is blank.
The Secretary of State for Scotland talked of the great freedom that the Bill would bring about—freedom from interference by the Government. He said that private capital and private industry would determine events. The Bill needs another title—it is not only about the privatisation of electricity; the right hon. and learned Gentleman spoke of the abolition of the Department of Energy. That means the abolition of the pursuit of an energy policy. I predicted six months ago that it was planned to abolish that Department. Ministers and civil servants will become redundant as a result of this Bill. It is a pity that the Under-Secretary of State, who has worked so hard on the Bill, may be one of its casualties.
The Conservative party was responsible for setting up the Department of Energy. Someone told me the other day that the Conservatives are so busy changing the policies and structures of previous Governments that they are now turning in on themselves and beginning to change policies and programmes that they instituted.
The abolition of the Department of Energy would be a tragedy for the country. The Government do not even pretend that there should be an energy policy. The signal to abolish the Department of Energy is the signal that energy policy will be left to free market forces.
It has been clear throughout the passage of the Bill that the people reject it. We heard earlier that as many as 70 per cent. of the electorate opposed the Bill. The Government are ignoring the wishes of the people. They are using their majority to drive through their dogma.
The Bill is being speeded to the other place. The Government are not sure how it will work and to some extent it is a stab in the dark. The Government are passing the Bill with a prayer in their heart. Let us hope that lights do not go out as a consequence of the Bill. I hope that the other place will look closely at it because it is not in the interests of the British people.

Mr. Malcolm Bruce: As the hon. Member for Midlothian (Mr. Eadie) has said, we are now speeding the Bill to the other place. The other House will make amendments that we have failed to have accepted. Even though the Bill is ill-thought out, the Government have accepted virtually no modifications even after 156 hours in Committee and three days of debate in the House. Opposition Members are extremely frustrated that Ministers are not prepared to acknowledge that they have lost many of the arguments and have had to force their will by way of the votes.
I have made it clear from the start that for many years I have not supported the prevailing status quo in the electricity supply industry. The one area in which I have had some possibility of agreement with the Government is in the analysis that restructuring is necessary. It is much more sensible to liberalise before privatising. That is better than creating a duopoly that will not provide effective competition and assuming that an untested carve-up will produce good results for the consumer, although all the evidence suggests that it will not.
The Government have resisted attempts to ensure that the Bill will give high priority to the promotion of energy conservation and reduce the impact of the energy supply industry on the environment. In spite of their protestations outside the House, the Government have resisted every amendment on those subjects. The industry is about to be given to a private sector that has no responsibility to increase energy conservation or to reduce the impact of the industry on the environment. That is a damning indictment of the so-called environmental commitment of the Government. Such a commitment does not exist and to them the pursuit of profit is far more important than concern for the environment and the industry's impact on it.
The way in which the Government have been forced to fix the nuclear component of the Bill has made a mockery of effective competition. The nuclear industry will have to accept that at some time in future it and every other sector of the industry will have to stand up and be counted within a competitive environment. The Government know, because otherwise they would not have structured the Bill in the way that they have, that if that sector of the industry were made to do that it would fall flat on its face. Nobody wishes to invest in that sector. In spite of all the distortions and the fixes that the Government have put into the Bill, all the signs are that the City is still not interested in putting money into the nuclear industry.
The Government have the audacity to lecture people inside and outside the House about free enterprise and the market economy. Yet they are effectively saying to the City of London and the public at large that the nuclear industry will be offered on the basis that the private investor will take the profits and the taxpayer will underwrite the risk. How can the Government continue to claim that they believe in a free market when they are creating an industry more featherbedded than any other sector of the economy? That is the most absurd component in the Bill.
In a rare contribution to the debate on the Bill, the Secretary of State for Scotland said that privatisation will be good for Scotland. Apparently the first good thing that Scotland has got out of it is an increase in electricity prices higher than anywhere else in the United Kingdom.


In Committee we told Ministers that the two specific requirements in the Bill that tariffs should be based on average United Kingdom prices and that, effectively, prices should operate on the basis of return on capital will mean that prices in Scotland will increase faster than anywhere else in the United Kingdom. Ministers were not able to deny that. That will be particularly true if the Scottish supply industry is not able to dispose of its substantial surplus activity, which it will have difficulty in doing. In those circumstances, the people of Scotland will experience the opposite effect over the next few years as their electricity bills rise well above the United Kingdom average, with consequent increases in hardship.
The Government have neither succeeded in persuading the House of the virtues of their argument nor, more offensively, even attempted to do so. They have laid back on the size of their parliamentary majority and treated the Opposition with contempt. We can take that because we have become used to it, but, far more important, the Government have treated the British people with contempt. They have shown not the slightest interest in the representations that have been made by a wide variety of interest groups. They have not won any of the arguments, although they will win the vote tonight. They have taken a step that will have to be corrected at a later date by a future Government.
I hope that the prospectus will contain a notification that if there is a change of Government, there will be a change of environment, the regulator will effectively regulate, and real competition will be brought into the industry, rather than the measures that the Government are proposing.

Mr. Tom Cox: The Third Reading of the Bill will see the end of a policy for the electricity industry, the overriding priority of which was to keep the supply going. We have heard a great many statements about how wonderful a private electricity industry will be. No one ever writes to me saying that. On the contrary, I have received an enormous number of letters from constituents who are extremely concerned, as have hon. Members who have spoken in the debate. I am sure that even Conservative Members have received such letters.
We should always remember that, since the formation of the state-run electricity industry, it has met the needs not only of the great cities but of the rural areas. When there were privately run companies, the needs of many of those rural areas were not met. Electricity was not supplied to many of them not because they did not want it but because the companies were not prepared to pay the costs of bringing the supply to them. Now the criterion of profit will be put first.
Even at this late stage, it is wise to comment on the remarks made by Mr. John Baker, the designated head of National Power. He said:
The job isn't about shouldering national responsibilities but about meeting contracts, improving profitability, about seeking opportunities, but only exploiting them if it pays to do so … We need to define ways of running our power stations so that we can exploit our power contracts profitably. Our task will not be to keep the lights on whatever the cost".
That should be made known to the public.
I have read the Official Report of the Committee sittings, and have listened to some of the debates in the House. We have heard much about "consumer interests" and "competition". It all sounds wonderful, but there is

nothing in the Bill to ensure that there is competition. Prices will not even stabilise, let alone go down. They will increase. The Government imposed increases in 1988 and 1989, and they will be the criteria that the private companies use.
What is most tragic is that, although we are a rich nation, we cannot use our resources without planning over the whole range of electricity policy. But where is any long-term planning provided for in the Bill? Where is real public accountability or consultation enshrined in the Bill? Despite what the Minister has said, nothing of the sort is to be found in it.
I have raised only some of the vital issues that should have been discussed. As those who were members of the Committee that considered the Bill have said, long-term planning, public accountability and consultation were not really discussed in Committee. The great tragedy is that in the long term it will be the British people who will pay for the folly of the privatisation of our great electricity industry. It was highly profitable when it was state run and it met real needs, whether in large cities or small rural areas. The industry met the needs of the British people. They will not be met when the Bill is enacted.

Mr. Hardy: I hesitated before I decided to speak once again on the Bill. It was the contribution of the Secretary of State for Scotland that persuaded me that I should make some brief comments. The right hon. and learned Gentleman said that the electricity industry wanted privatisation. Those who are at the top of the industry, who may see substantial increases in their salaries, may want it. With the contacts that I have in the power industry, I have not detected any wish to embrace privatisation.
The Government may feel that they can persuade those who work in the industry to accept privatisation when they are offered shares, but more and more of them have come to the conclusion that the offer will leave them with less than 1 per cent. of the equity. Relatively shortly after the shares have been allotted, we shall find that there are larger shareholdings in Tokyo, Bonn, Ottawa, New York and all the other financial centres of the world than among those who work in the industry who do not want privatisation.
As Conservative Members have boasted, this is the largest privatisation that the Government have proposed. Conservative Members to a man have trooped through the Government Lobby in support of it. Not one of them has ever asked how much the country will get for the privatisation. The Minister knows that the net asset value of the industry is well over £14 billion. He may be able to reduce that figure by writing down capital, but when the industry is sold it will be lucky if the price is half of its real value.
It was said earlier today that we have already sold the family silver and that now we are selling the family gold. Unfortunately, when the gold is sold it will be at the going rate for silver, not for gold. The interests of the nation will be gravely disregarded. The value of Britain, in terms of the worth of the electricity industry, will be dramatically reduced. The bargain for the consumer will be a bad one. Indeed, the consumer is already paying far more than he should as a result of the sweetening exercise that has taken place since last year.
The Government will secure the Bill's passage through Parliament, but over the next two years the British people will realise that they have been robbed. They will realise that their assets have been disposed of cheaply. They will understand that to a large extent profits will accrue for only a small minority. The guarantee of supply, which has been the proud boast of the industry in public hands, will not be guaranteed or sustained in the years ahead. The Government will regret the enactment of the Bill, and from that point of view I suppose that we have some cause for rejoicing. The people have begun to understand that what the Government are about is not in the long-term interests of the nation.

Mr. Ieuan Wyn Jones: I, too, do not wish to detain the House for long, but the Opposition have an obligation to puncture the utter complacency of the Secretary of State for Scotland, who sought to commend the Third Reading. He trotted out the usual slogans that we have heard from the Government on this and other measures. I thought to myself that one slogan was missing because the Government's slogans came in threes. The right hon. and learned Gentleman used two, talking about choice and consumers. What about value for money? He did not mention it once.
We have heard that we are to have thumping big electricity price rises as a sweetener for the industry. Even the slogans that the right hon. and learned Gentleman used are false. We have heard much about competition. What competition? It is impossible to see any way in which the consumer can make an effective choice about the company from which he gets his electricity. The only option is for him to pay the bill, which will be higher than it has been.
The Secretary of State for Scotland and his colleagues would do well to look again at the recent report of the Select Committee on Energy, of which my hon. Friend the Member for Banff and Buchan (Mr. Salmond) was a member. Two telling comments will haunt the Government following privatisation. The Committee said:
Electricity is too important an industry for the country to gamble that everything will come out right";
and
The Government has singled out only two factors to justify its decision; security of supply and party manifesto commitment to a continuing nuclear programme. It has glossed over the industry's economics, ignored the industry's external costs, and still cannot be sure that the favoured PWR technology is the best available.

Mr. Rost: Will the hon. Gentleman give way?

Mr. Jones: I am not prepared to give way because my contribution must be short.
The public and the consumer have been conned, but the voting public at the next election will not be conned.

Mr. Jack Thompson: I am not an economist or accountant. My background is in engineering and my discussion on the Bill has been with engineers in the industry. The engineers—not the management—are critical of the privatisation propositions. One engineer commented, "It is like a bicycle. If the pedals and the

cranks are taken off the chain and the sprockets on the wheel., the bicycle will not work." That is what is happening with the industry.
The implication is that the CEGB and the area boards have not been efficient. Having spent some time with the good officers of the North Western electricity board, I refute that suggestion. That board was very efficient. My experience was that it was exceptional. I have links with the electricity board in my area which is aware of the consumers' needs and problems.
If a problem is to arise with the industry, it will be a technical one. If there is an argument to restore the industry to state control, it will be a technical one which will be irrefutable. The industry started with a municipal electricity supply and links with private electricity suppliers. There was no choice between the wars other than to have a nationalised industry. That argument will be made again, and we shall have to restore the industry to public ownership not for political but for technical reasons.

Mr. Alan W. Williams: As I said in Committee and on Report, the Government have been on the defensive throughout the Bill's proceedings. That has been symbolised by the fact that only one Conservative Back Bencher has spoken on Third Reading. Often in Standing Committee the Secretary of State and Ministers were not just on the defensive but on the ropes—indeed, they were punch drunk at the end of several sittings from trying to defend some of the clauses.
I find no merit in the Bill. It will create a private monopoly because there will be no competition. Earlier, we challenged the Minister directly about what competition there would be for the individual householder. I think of people such as my mother, who is a widow and a pensioner. Apparently she can opt out and I suppose that she could devise her own supply, but in reality there will be no competition. The Bill also brings threats of price rises—6 per cent., 9 per cent. and much more to come when the shareholders want their cut.
The Bill provided an opportunity for measures on the environment and conservation, but the Government have pushed all such opportunities to one side. We have seen clearly that their commitment to the environment and green issues is non-existent. The Bill shows clearly the double standards for coal and the nuclear industry. The Government are carrying out a clear vendetta against the coal industry, which dates from the 1970s or even earlier than that. The Government are the descendants of the coal owners. [HON. MEMBERS: "Back to 1926."] That is right. The vendetta goes back to 1926 and before, and it has returned with a vengeance in the 1970s and 1980s and as a result of the miners' strike. I come from a part of the country that used to have many coal mines, but there are none left now. When I was elected, there were three just outside my constituency, but the number is down to one. Throughout our debates, we have seen the terrific pressure that will be put on the coal industry by privatisation and the free range of market forces—coal imports and the like. There will be no ring fencing or defence for the coal industry.
The nuclear industry will be completely ring-fenced under the Bill, with the nuclear quota, the nuclear tax and the pressurised water reactors that nobody wants. There


will be problems of waste and decommissioning, yet the Government volunteer to take back those problems and to pay the bills. That is an appalling double standard. The public have noticed that fact through the reports of our debates and we shall carry on explaining that to them. They have noticed that one set of principles is applied to coal, whereas the nuclear industry is to be protected.

Dr. Kim Howells: I want to reinforce my hon. Friend's point. It is curious that the Government have chosen to ring-fence the nuclear industry as a reliable source of energy and electricity, yet they have refused to ring-fence the Nottingham coalfield, which in their books has been a marvellous and reliable source of electricity and energy. It is curious. We own the coal underground in Nottinghamshire, yet we do not own the uranium that we send to our nuclear power stations.

Mr. Williams: The Government's logic is strange. However, the public have seen what is happening and they do not like the Bill or the privatisation of water. Public opinion is overwhelmingly on our side. We have tried to reflect the views of the consumers, the taxpayers and the electorate. Unfortunately, the Government have not accepted any of our clauses or amendments and they will suffer for that at the hour of reckoning.

Mr. Maxton: I shall be brief, but it is essential to make several points before this obnoxious piece of legislation leaves the Commons, especially in view of the case put by the Secretary of State for Scotland, who is deputising for the Secretary of State for Energy who is yet again swanning round the world.
Nothing in Committee or on Report has convinced me that I was wrong to argue that we should never have had Scottish legislation dealt with in an English and Welsh Bill. It has made it difficult to put the Scottish case and the Scottish people have not had the opportunity to consider it fully. Of course, it has exposed cruelly the Tory party's total failure to persuade the Scottish people of their case and their inability to conform to the normal constitutional conventions on Scottish legislation in this House because of their disastrous defeat in Scotland in 1987.
The Bill, like the Tory party itself, has little support in Scotland. Despite what the Secretary of State said, few employees at any level believe that the Bill will do anything for Scotland. Among the consumer organisations, political parties and churches in Scotland, it is difficult to find anyone who is not opposed to the Bill. Its opponents, I may add, include the Scottish CBI. The people of Scotland want their electricity supply industry to remain in public hands, and the Government have a responsibility, which they never fulfil, to listen to their voices.
My hon. Friends have shown that the Bill will create no real competition in England and Wales. The vertically integrated nature of the new companies in Scotland, with generation, transmission and supply all carried out by one company in clearly delineated geographical areas of Scotland, will deprive Scottish consumers of even a phoney facade of competition. The Bill creates private monopolies which, despite the so-called controls that the licences and regulation are supposed to impose on them, will be able to exploit their position to maximise profit at the expense of Scottish consumers.
Yet again the Secretary of State for Scotland abdicated his responsibility for the electricity supply industry in Scotland. The headquarters of the South of Scotland electricity board are in my constituency, and most of the board members live in or near my constituency. The headquarters of the North of Scotland Hydro-Electric Board are in Edinburgh. If the Secretary of State had read his own press release or had bothered to attend our debates last week, during which I quoted him, he would know that it said that he had issued an instruction to the boards in connection with their financial limits. It was not the Treasury that did that; it was the Secretary of State for Scotland.
At present, control of the electricity supply industry in Scotland rests in Scotland. The Government have riot given us a single guarantee that after privatisation that control will lie anywhere other than outside Scotland—perhaps even outside the United Kingdom.
The price of electricity has already been increased by 8 per cent. to fatten up the industry to make it attractive to the new shareholders, as Mr. Joughin, the chairman of the North of Scotland Hydro-Electric Board said. If that can happen before privatisation, how much worse will it be afterwards? The Bill will mean higher prices, poorer services for consumers, probably the end of the coal industry in Scotland, a deterioration in the environment and hardship for the poorest members of society. The Bill is unwanted and unnecessary. Its sole purpose is to give fast bucks to the Government's friends in the City, and I ask my hon. Friends to join me in voting against its Third Reading.

Mr. Michael Spicer: Rather to the Opposition's surprise, we have been happy to join them on what they thought was their chosen ground—the issue of prices—because we know that it must exert a downward pressure on prices if we replace the present structure of the industry under which a monopoly generates its own costs and supplies the industry on the basis of those costs, without intervention.
The hon. Member for Sedgefield (Mr. Blair) designated today consumer day. I told the House that, once the Bill has been passed, every day will be consumer day because every aspect of the Bill is devoted to ensuring that the consumer gets a better deal. That is not only true in relation to prices; there will be a panoply of consumer rights and competitive pressure not only on generation, which accounts for 70 per cent. of the industry's costs, but on the public electricity supply industries. New duties will be placed on the regulator to ensure that the consumer is well cared for. In particular—something that the Opposition have not been willing to concede as a great new benefit—consumer committees will in future be part of the regulatory body rather than merely shouting their views from the touch line.
In this short debate the hon. Member for Wentworth (Mr. Hardy) rightly said that this will be the largest privatisation of all time. Added to the 9 million shareholders—three times the number when we took office—will no doubt be considerably more private shareholders, and many will no doubt be the employees or the industry to whom we shall give special terms.
One enormous advantage of privatisation will be that the massive investment programme that is due to take place in the industry will be determined not on the basis of decisions——

Mr. Dick Douglas: rose——

Mr. Spicer: No, I shall not give way. The hon. Gentleman has not been here——

Mr. Douglas: rose

Mr. Spicer: No, I shall not give way. It is too late. I am not giving way to the hon Gentleman or to anybody else at this stage because I have promised to be brief.
Massive investment decisions are ahead. The decisions to invest will be made not on the basis of political infighting in Whitehall or behind beige doors in Whitehall, but on the basis of market conditions, and will be determined by the market place.
Our reforms of the electricity supply industry, which are undoubtedly radical, are aimed at making Britain's electricity supply industry one of the most efficient in the world. We believe that as the European market opens up in 1992 and transnational common carriage becomes a real possibility, Britain will have the opportunity to become the power house of Europe.
What we are proposing to do is what some people have argued is impossible—to turn a massive producer-driven public sector monopoly into a series of customer-oriented private companies, many with shares that are owned by their employees and many of which will be competing with one another for business. In future the customer will call the tune, which is something that, despite all the protestations to the contrary, all the rhetoric and all the press releases, is not and never will be central to the beliefs of the Socialist party, the Opposition.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 251, Noes 193.

Division No. 151]
[10.57 pm


AYES


Adley, Robert
Body, Sir Richard


Aitken, Jonathan
Bonsor, Sir Nicholas


Alexander, Richard
Boscawen, Hon Robert


Alison, Rt Hon Michael
Boswell, Tim


Allason, Rupert
Bottomley, Peter


Amess, David
Bottomley, Mrs Virginia


Amos, Alan
Bowden, Gerald (Dulwich)


Arbuthnot, James
Bowis, John


Arnold, Jacques (Gravesham)
Brandon-Bravo, Martin


Arnold, Tom (Hazel Grove)
Brazier, Julian


Ashby, David
Bright, Graham


Aspinwall, Jack
Brown, Michael (Brigg &amp; Cl't's)


Atkins, Robert
Bruce, Ian (Dorset South)


Atkinson, David
Buchanan-Smith, Rt Hon Alick


Baker, Rt Hon K. (Mole Valley)
Buck, Sir Antony


Baker, Nicholas (Dorset N)
Budgen, Nicholas


Baldry, Tony
Burns, Simon


Banks, Robert (Harrogate)
Burt, Alistair


Batiste, Spencer
Butcher, John


Beaumont-Dark, Anthony
Butterfill, John


Bellingham, Henry
Carlisle, Kenneth (Lincoln)


Bendall, Vivian
Carrington, Matthew


Bennett, Nicholas (Pembroke)
Carttiss, Michael


Benyon, W.
Chalker, Rt Hon Mrs Lynda


Bevan, David Gilroy
Chapman, Sydney


Bitfen, Rt Hon John
Chope, Christopher


Blackburn, Dr John G.
Clark, Sir W. (Croydon S)





Colvin, Michael
Janman, Tim


Conway, Derek
Jessel, Toby


Coombs, Anthony (Wyre F'rest)
Jones, Robert B (Herts W)


Coombs, Simon (Swindon)
Kellett-Bowman, Dame Elaine


Cope, Rt Hon John
Key, Robert


Couchman, James
King, Roger (B'ham N'thfield)


Cran, James
Kirkwood, Archy


Curry, David
Knapman, Roger


Davies, Q. (Stamf'd &amp; Spald'g)
Knight, Greg (Derby North)


Davis, David (Boothferry)
Lamont, Rt Hon Norman


Day, Stephen
Lang, Ian


Devlin, Tim
Latham, Michael


Dicks, Terry
Lawrence, Ivan


Dorrell, Stephen
Lee, John (Pendle)


Douglas-Hamilton, Lord James
Lennox-Boyd, Hon Mark


Dover, Den
Lester, Jim (Broxtowe)


Dunn, Bob
Lightbown, David


Durant, Tony
Lilley, Peter


Eggar, Tim
Lloyd, Sir Ian (Havant)


Emery, Sir Peter
Lord, Michael


Evennett, David
Lyell, Sir Nicholas


Fairbairn, Sir Nicholas
McCrindle, Robert


Fallon, Michael
Macfarlane, Sir Neil


Favell, Tony
MacGregor, Rt Hon John


Field, Barry (Isle of Wight)
MacKay, Andrew (E Berkshire)


Finsberg, Sir Geoffrey
McLoughlin, Patrick


Fishburn, John Dudley
McNair-Wilson, Sir Michael


Fookes, Dame Janet
McNair-Wilson, P. (New Forest)


Forman, Nigel
Major, Rt Hon John


Forsyth, Michael (Stirling)
Malins, Humfrey


Fox, Sir Marcus
Mans, Keith


Franks, Cecil
Maples, John


Freeman, Roger
Marshall, Michael (Arundel)


Fry, Peter
Martin, David (Portsmouth S)


Gale, Roger
Mates, Michael


Gardiner, George
Maxwell-Hyslop, Robin


Garel-Jones, Tristan
Mayhew, Rt Hon Sir Patrick


Gill, Christopher
Meyer, Sir Anthony


Glyn, Dr Alan
Miller, Sir Hal


Goodlad, Alastair
Mills, Iain


Goodson-Wickes, Dr Charles
Mitchell, Andrew (Gedling)


Gow, Ian
Mitchell, Sir David


Greenway, Harry (Ealing N)
Moate, Roger


Greenway, John (Ryedale)
Montgomery, Sir Fergus


Gregory, Conal
Morris, M (N'hampton S)


Griffiths, Sir Eldon (Bury St E')
Morrison, Sir Charles


Griffiths, Peter (Portsmouth N)
Morrison, Rt Hon P (Chester)


Grist, Ian
Moss, Malcolm


Ground, Patrick
Moynihan, Hon Colin


Grylls, Michael
Neale, Gerrard


Hague, William
Nelson, Anthony


Hamilton, Hon Archie (Epsom)
Neubert, Michael


Hamilton, Neil (Tatton)
Newton, Rt Hon Tony


Hampson, Dr Keith
Nicholls, Patrick


Hanley, Jeremy
Nicholson, David (Taunton)


Hargreaves, A. (B'ham H'll Gr')
Nicholson, Emma (Devon West)


Hargreaves, Ken (Hyndburn)
Norris, Steve


Harris, David
Onslow, Rt Hon Cranley


Hayes, Jerry
Oppenheim, Phillip


Hayhoe, Rt Hon Sir Barney
Page, Richard


Hayward, Robert
Paice, James


Heathcoat-Amory, David
Patnick, Irvine


Heddle, John
Patten, Chris (Bath)


Heseltine, Rt Hon Michael
Patten, John (Oxford W)


Higgins, Rt Hon Terence L.
Pawsey, James


Hill, James
Peacock, Mrs Elizabeth


Hogg, Hon Douglas (Gr'th'm)
Porter, Barry (Wirral S)


Hordern, Sir Peter
Porter, David (Waveney)


Howard, Michael
Portillo, Michael


Howarth, Alan (Strat'd-on-A)
Powell, William (Corby)


Howarth, G. (Cannock &amp; B'wd)
Price, Sir David


Howell, Rt Hon David (G'dford)
Raffan, Keith


Hughes, Robert G. (Harrow W)
Raison, Rt Hon Timothy


Hunt, David (Wirral W)
Rathbone, Tim


Hunt, John (Ravensbourne)
Redwood, John


Hunter, Andrew
Renton, Tim


Hurd, Rt Hon Douglas
Rhodes James, Robert


Irvine, Michael
Riddick, Graham


Jack, Michael
Ridley, Rt Hon Nicholas


Jackson, Robert
Rifkind, Rt Hon Malcolm






Roberts, Wyn (Conwy)
Stern, Michael


Rost, Peter
Stevens, Lewis


Rumbold, Mrs Angela
Stewart, Andy (Sherwood)


Ryder, Richard
Stewart, Rt Hon Ian (Herts A


Shaw, David (Dover)
Stradling Thomas, Sir John


Shaw, Sir Giles (Pudsey)
Summerson, Hugo


Shaw, Sir Michael (Scarb')
Taylor, Ian (Esher)


Shelton, Sir William
Taylor, John M (Solihull)


Shephard, Mrs G. (Norfolk SW)
Tebbit, Rt Hon Norman


Shepherd, Colin (Hereford)
Thurnham, Peter


Shersby, Michael
Tredinnick, David


Smith, Sir Dudley (Warwick)
Trotter, Neville


Smith, Tim (Beaconsfield)
Waddington, Rt Hon David


Speed, Keith
Wakeham, Rt Hon John


Spicer, Sir Jim (Dorset W)
Widdecombe, Ann


Spicer, Michael (S Worcs)
Younger, Rt Hon George


Squire, Robin



Stanbrook, Ivor
Tellers for the Ayes:


Stanley, Rt Hon Sir John
Mr. David Maclean and Mr. Tom Sackville.


Steen, Anthony





NOES


Abbott, Ms Diane
Cox, Tom


Allen, Graham
Crowther, Stan


Alton, David
Cryer, Bob


Archer, Rt Hon Peter
Cummings, John


Armstrong, Hilary
Cunliffe, Lawrence


Ashdown, Rt Hon Paddy
Cunningham, Dr John


Ashley, Rt Hon Jack
Dalyell, Tam


Ashton, Joe
Davies, Ron (Caerphilly)


Banks, Tony (Newham NW)
Davis, Terry (B'ham Hodge H'l)


Barnes, Harry (Derbyshire NE)
Dewar, Donald


Barron, Kevin
Dixon, Don


Battle, John
Dobson, Frank


Beckett, Margaret
Doran, Frank


Bell, Stuart
Douglas, Dick


Bennett, A. F. (D'nt'n &amp; R'dish)
Duffy, A. E. P.


Bermingham, Gerald
Dunwoody, Hon Mrs Gwyneth


Bidwell, Sydney
Eadie, Alexander


Blair, Tony
Eastham, Ken


Boateng, Paul
Evans, John (St Helens N)


Bray, Dr Jeremy
Ewing, Harry (Falkirk E)


Brown, Ron (Edinburgh Leith)
Fatchett, Derek


Bruce, Malcolm (Gordon)
Faulds, Andrew


Buchan, Norman
Fearn, Ronald


Buckley, George J.
Field, Frank (Birkenhead)


Caborn, Richard
(L'pool B G'n)


Callaghan, Jim
Fisher, Mark


Campbell, Menzies (Fife NE)
Flannery, Martin


Campbell, Ron (Blyth Valley)
Flynn, Paul


Campbell-Savours, D. N.
Foot, Rt Hon Michael


Carlile, Alex (Mont'g)
Foster, Derek


Clark, Dr David (S Shields)
Foulkes, George


Clarke, Tom (Monklands W)
Fraser, John


Clay, Bob
Fyfe, Maria


Clelland, David
Garrett, Ted (Wallsend)


Cohen, Harry
George, Bruce


Coleman, Donald
Godman, Dr Norman A.


Cook, Robin (Livingston)
Golding, Mrs Llin


Corbett, Robin
Gordon, Mildred


Corbyn, Jeremy
Gould, Bryan


Cousins, Jim
Grant, Bernie (Tottenham)





Griffiths, Nigel (Edinburgh S)
Mowlam, Marjorie


Griffiths, Win (Bridgend)
Mullin, Chris


Grocott, Bruce
Murphy, Paul


Hardy, Peter
Nellist, Dave


Harman, Ms Harriet
O'Brien, William


Haynes, Frank
O'Neill, Martin


Healey, Rt Hon Denis
Orme, Rt Hon Stanley


Henderson, Doug
Patchett, Terry


Hinchliffe, David
Pendry, Tom


Holland, Stuart
Pike, Peter L.


Home Robertson, John
Powell, Ray (Ogmore)


Howarth, George (Knowsley N)
Prescott, John


Howells, Dr. Kim (Pontypridd)
Quin, Ms Joyce


Hughes, John (Coventry NE)
Radice, Giles


Hughes, Robert (Aberdeen N)
Randall, Stuart


Hughes, Roy (Newport E)
Redmond, Martin


Hughes, Sean (Knowsley S)
Rees, Rt Hon Merlyn


Hughes, Simon (Southwark)
Reid, Dr John


Illsley, Eric
Richardson, Jo


Janner, Greville
Robertson, George


Jones, Barry (Alyn &amp; Deeside)
Robinson, Geoffrey


Jones, Ieuan (Ynys Môn)
Rogers, Allan


Jones, Martyn (Clwyd S W)
Rooker, Jeff


Kaufman, Rt Hon Gerald
Ross, Ernie (Dundee W)


Kennedy, Charles
Rowlands, Ted


Kitfedder, James
Ruddock, Joan


Kirkwood, Archy
Salmond, Alex


Lambie, David
Sedgemore, Brian


Lamond, James
Sheerman, Barry


Leighton, Ron
Sheldon, Rt Hon Robert


Lestor, Joan (Eccles)
Skinner, Dennis


Lewis, Terry
Smith, Andrew (Oxford E)


Lloyd, Tony (Stretford)
Smith, C. (Isl'ton &amp; F'bury)


Lofthouse, Geoffrey
Smith, Rt Hon J. (Monk'ds E)


Loyden, Eddie
Snape, Peter


McAllion, John
Soley, Clive


McAvoy, Thomas
Steinberg, Gerry


Macdonald, Calum A.
Stott, Roger


McFall, John
Taylor, Mrs Ann (Dewsbury)


McKelvey, William
Taylor, Matthew (Truro)


McLeish, Henry
Thompson, Jack (Wansbeck)


McWilliam, John
Turner, Dennis


Madden, Max
Vaz, Keith


Mahon, Mrs Alice
Wall, Pat


Marek, Dr John
Wallace, James


Marshall, David (Shettleston)
Walley, Joan


Martin, Michael J. (Springburn)
Wareing, Robert N.


Martlew, Eric
Welsh, Andrew (Angus E)


Maxton, John
Welsh, Michael (Doncaster N)


Meacher, Michael
Williams, Rt Hon Alan


Meale, Alan
Williams, Alan W. (Carm'then)


Michie, Bill (Sheffield Heeley)
Winnick, David


Michie, Mrs Ray (Arg'l &amp; Bute)
Wise, Mrs Audrey


Mitchell, Austin (G't Grimsby)
Worthington, Tony


Moonie, Dr Lewis



Morgan, Rhodri
Tellers for the Noes:


Morley, Elliott
Mr. Allen Adams and Mr. Allen McKay.


Morris, Rt Hon A. (Wshawe)

Question accordingly agreed to.

Bill read the Third time, and passed.

Lord Chancellor (Salary)

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): I beg to move,
That the draft Lord Chancellor's Salary Order 1989, which was laid before this House on 14th March, be approved.
The need for this order arises out of the link between the salaries of the Lord Chancellor and the Lord Chief Justice. The independent Top Salaries Review Body recommended in 1983 that the Lord Chancellor should be paid more than the Lord Chief Justice in recognition of his position as the head of the judiciary and of his wider responsibilities. The House accepted the principle of the TSRB recommendation, and has successively reaffirmed that with the approval of the Lord Chancellor's salary orders for the years 1984 to 1988.
An annual Lord Chancellor's salary order is necessary because the Lord Chief Justice's salary is set annually following the recommendations of the Top Salaries Review Body. This year the TSRB recommended a salary of £89,500 for the Lord Chief Justice—a 5 per cent. increase. The Government accepted that that figure be paid from the due date of 1 April 1989.

Mr. Dennis Skinner: Is the Leader of the House quite sure that he has got all his Tory Back Benchers into line on this issue?

Dame Elaine Kellett-Bowman: No.

Mr. Skinner: Already, we have heard the first cuckoo.
Is the right hon. Gentleman aware that there has been a lot of talk in the corridors from Tory Members of Parliament, barristers and others in the legal profession, who are fuming with the current Lord Chancellor—on his big fat salary of £91,500 a year—for trying to introduce those new measures and upsetting their cosy little existence? How many votes does the right hon. Gentleman expect to get tonight if there is a Division?

Mr. Wakeham: I have been here long enough to know not to count the votes before a Division. I attended the debate in the House of Lords on Friday and I did not see the hon. Gentleman there.

Mr. Skinner: I was in here.

Mr. Wakeham: I was in here, too, earlier on. The debate was a much more balanced affair than the hon. Gentleman might have thought.
The Lord Chancellor has a salary lead of £2,000. The House accepted this figure in 1983 and it has remained at that level since. Its real value has eroded since it was first established, but that is of little significance in itself and is not a valid reason for changing it. The lead exists because the Lord Chancellor is head of the judiciary, and that makes it right that an appropriate differential should exist between him and the Lord Chief Justice.
The order establishes the Lord Chancellor's salary at £91,500 from the day it comes into force. It cannot be made retrospective. The salary level derives directly from a TSRB report and embodies a principle established six years ago, which has been accepted by the House on six previous occasions. I hope that once again it will commend itself to the House this year.
I commend the order to the House.

Sir Nicholas Fairbairn: It may be appropriate for me to comment, as a member of the Scots Bar, about the salary of a Lord Chancellor who appears determined to make alterations to the structure of the law of England that I regard as devastatingly improper in relation to the benefit of the client in England. I feel that I can say so for two reasons. First, as it is not my Bar and it will not affect me, nobody can say, "He would say that, wouldn't he?" [HON. MEMBERS: "He would say that wouldn't he?"] Those hon. Members may know that there is a consultation paper in Scotland that does not make the proposals which have been made by the Lord Chancellor for the law in England.
I know that the Leader of the House listened to parts of the debate in the other place on Friday. Some of us also heard large parts of that debate, including the remarks of the Lord Chief Justice and the Master of the Rolls. Whatever their language, it was clear to those of us who listened that they did not take the view that the Scottish Lord Chancellor, as head of the English judiciary, had consulted them. From the language of the Lord Chief Justice's speech I should have thought that the order, which provides for the Lord Chancellor to receive a £2,000 lead over the Lord Chief Justice, might have been irked in the circumstances.
There are three matters that I will put before the House for its consideration. The first is the allegation in the proposals in the Green Paper entitled
The Work and Organisation of the Legal Profession.
that the changes will make it cheaper for the client.
When the Lord Chancellor was dean of the Faculty of Advocates in Scotland it was suggested that the costs of divorce would be reduced if divorce were transferred from the exclusive right of audience in the Court of Session to the sheriff court. Costs have doubled.
The Green Paper says that barristers in England face the extraordinary difficulty of being unable to find chambers in the crowded facilities of the Inns of Court. The Lord Chancellor has a flat in the Inns of Court as well as a tithe cottage at the other end of this House.
Most important of all, if one removes from the people who have to go to law the right to choose a specialist one will not only remove the service that they should receive, but increase the price of that service. In addition, it will destroy what is most special about the difference between specialist advocates and general solicitors. The general solicitor has a symbolic relationship with his client whereas the relationship between the advocate and his client is singular and provides a service of excellence that is infinitely cheaper than would be the case were the system destroyed by the current proposals which have been poorly thought out. They are in contradistinction of the recommendations made by the Lord Chancellor when he was dean of the Faculty of Advocates which spoke of the essential requirement to keep the Bar intact and separate. I say that as a Scotsman. It is an ill-service to the law of England.
Opposition Members on the funny Benches frequently say that Scotland is being used as a guinea pig for the community charge. I do not like England being used as a guinea pig by a Scottish Lord Chancellor. If he wants freedom of choice and a legal profession that we can all afford, what about if he forgoes his salary until his case is proven?

Mr. Ivan Lawrence: The question is: is the Lord Chancellor doing such a fine job that he deserves a salary increase? What a pity that we have only one and a half hours in which to discuss this extremely important matter, because I have enough to say on the subject to make the four and a half hour speech that I dedicated to trying to stop the poisoning of our drinking water by the addition of fluoride seem like the twinkling of an eye. It is also a pity that we have only this golden one and a half hours once a year to exercise any control—or at any rate, any influence—over the Lord Chancellor's discharge of his political duties.
By what criteria should we presume to judge whether the work of so eminent a legal luminary, so highly regarded a judicial figure, so well-admired and well-liked a political person, is worthy of the accolade that we are asked to give him tonight, expressed in the sordid terminology of money? May I have the temerity to suggest a test? Is the Lord Chancellor going to improve the legal system of the United Kingdom so that it will better serve the people—not the lawyers—of Britain? Is he making the legal system cheaper and more accessible for the consumer? Will it be a service of higher quality for the consumer?
By these criteria, sadly I have to conclude that many people who know and understand these matters are by no means convinced that—however good, honourable and well-intentioned a man, however brilliant a Scottish lawyer and judge he may have been, however eminent and well loved he undoubtedly is to anyone who has been privileged to know him personally in his work—the Lord Chancellor is the wrong man for this salary at this time.
No other Lord Chancellor in living memory, perhaps in our history, has succeeded in antagonising almost the entire legal profession throughout the land. Has there ever been a debate in the House of Lords, on a Friday of all days, in which 56 of their Lordships rose—nearly all of them in anger—at his well-meaning but destructive proposals? They will pull up by the roots the legal profession as we know it, which—for all its faults—still works reasonably well and is the envy of the civilised world.
Are all the greatest legal minds of the land incensed for no reason? These include the Lord Chief Justice of England, two former Lord Chancellors, the Master of the Rolls, all nine Law Lords and a most distinguished former Attorney-General who threatened to resign the Conservative Whip. There is also an impressive list of non-lawyer luminaries—many from the Opposition side —including Lord Benson, chairman of the recent royal commission on legal services, Lord Rees-Mogg, the former editor of The Times, who felt so strongly that he used his maiden speech to speak against the proposals, Lord Murray of Epping Forest and Lord Longford. That is a long list of unquestioned authority and influence from Opposition as well as Conservative Benches and outside Parliament are the——

Mr. Robert N. Wareing: rose——

Mr. Lawrence: I shall give way in a moment. Outside Parliament are the High Court and circuit judges, and most of the Bar.
None of the people in the House of Lords have the slightest financial interest in seeing the proposals defeated and cannot conceivably be said to be speaking in self-interest. It is a great achievement for the Lord Chancellor to have set so many of the people in the land who are best qualified through experience and judgment to assess the likely effects of the proposals against the Government and against their proposals for legal reform.

Mr. Wareing: Does the hon. and learned Gentleman agree that what distinguishes the Lord Chancellor from all the other people he has mentioned is that the Lord Chancellor was chosen by the Prime Minister, and that none of the present Government of yes men and women would defy her? If the hon. and learned Gentleman is suggesting that the Lord Chancellor's salary should be decreased, at least in real terms, should not the same be done to the Prime Minister's salary? Should not the hon. and learned Gentleman direct his wrath against the Prime Minister and the Government, who consult no one?

Mr. Lawrence: If I raised my wrath against the Prime Minister, I would be called out of order would I not, Madam Deputy Speaker?—as this is a debate about the Lord Chancellor's salary. Since I have no complaint to make about our excellent Prime Minister, who, in every field of her endeavour as leader of the ——

Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. and learned Gentleman is now being called to order. He is straying from the point.

Mr. Lawrence: It is only out of deference to your ruling, Madam Deputy Speaker, that I forbear from dwelling even longer on the achievements of our Prime Minister, the great leader of the country, who, in the——

Madam Deputy Speaker: Order. I have called the hon. and learned Gentleman to order. I am sure that he will contain himself now and speak to the order before us.

Mr. Lawrence: In the matter of the Lord Chancellor's salary, my right hon. Friend is making her first-ever error.
There are many reasons why the three Green Papers have been so angrily attacked. There are constitutional reasons and reasons of principle. I want to mention one particular sort of harm that will be done—the harm to the ordinary consumer of legal services. The claim that these proposals will be consumer-friendly is about as absurd as the claim that the salmonella scare will boost the sale of eggs.
Let us consider the cost of legal services under the proposals. If a young man or woman wants to leave university and go into the legal profession now, he or she has the choice of going to the Bar, which will be slow in yielding its returns but which in due course will give the right of audience to the higher courts, the right to become a Queen's Counsel, and the right to become a High Court judge. If the proposals go through, the graduate wanting to enter the legal profession will find all those advantages in becoming a solicitor, because the solicitor will have the right of audience in the higher courts, the right to become a Queen's Counsel and the right to become a High Court judge.
On top of that, the graduate will be able, if he joins a solicitor's firm, to be guaranteed a pension, holidays with pay, a car, steady work and a roof over his head—the kind of attractions which the Bar does not offer. In those


circumstances, who in his right mind would choose the risks of the Bar in preference to the absence of risk involved in joining a solicitors' firm? Almost every graduate in his right mind will choose to become a solicitor, and very few—there may be some—will prefer the misery of going to the Bar to the luxury of becoming a solicitor. If such people want to become advocates, they will become solicitor advocates, and the supply of barristers of the independent Bar will dry up.
At the other end of the profession, there are people at the Bar who have spent 20 or 30 years running around Britain. They are the people who have to wait for two, three or four weeks for another case to come on stream after the case in which they were involved has collapsed. They would leap at the offer of an advocate solicitorship with a leading firm in the City with all the luxuries and the assurance of the steady income that would accrue. At that end of the profession the Bar would be depleted.
At the end of the day fewer people will come to the Bar, there will be fewer people at the top and a much smaller independent Bar. Anyone who wants to be represented by a Marshall Hall or by my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) can go to the cab rank. People can go to the wonderful firm of solicitors of my hon. Friend the Member for Dorset, North (Mr. Baker). Someone seeking legal services can instruct my hon. and learned Friend the Member for Perth and Kinross and will get the best barrister in the land instructed by the best solicitor in the land.
But if my hon. and learned Friend the Member for Perth and Kinross decided to join the firm of my hon. Friend the Member for Dorset, North, people who need the services of a barrister would have to go to that firm in London to get his specific representation in court. The cab rank principle will disappear, one of the achievements of the British Bar and the British legal system will be diminished, and the consumer will suffer.
If there is a smaller cab rank and the number of independent barristers is reduced, what will happen to the provincial solicitor? I am talking about the small two or three-man firm in the country areas—most of the areas of Britain. Most of our constituents employ small country solicitors who cannot afford to have an advocate partner but instruct barristers to represent the interests of their clients in the most effective and efficient way. If there is no cab rank and those solicitors cannot make a living because their conveyancing work has all gone to estate agents, building societies and finance houses in the high street, they will close down and go to the big towns and cities to make a living.
The smaller consumer who wants to seek legal advice from a solicitor in a small town will not be able to find one and will have to go to the big towns and cities and pay big city prices. If that is one of the likely results of the Green Papers, who will suffer because of the lack of legal advice and legal services, not just from the Bar but from solicitors? The ordinary consumer, the person who sends us to this House and expects us to vote for salary increases for Lord Chancellors who will improve legal services, will suffer.
There is also the matter of quality. I accept that solicitors are inherently as capable as barristers. However, they are not specialists and they are not trained in court

work in the way that barristers are. They are unlikely to do the job as efficiently as barristers. Most of our solicitors deal with divorces, wills and conveyancing and with many kinds of problems, some of which are referred to us in our surgeries. Now and again they go to court and are expected to conduct an adequate defence of someone charged with rape, with running someone down or with killing a citizen through dangerous driving. If they are not doing that kind of work all the time, of course they are not as skilled.
I understand the points about monopoly and restrictive practices. We have a parallel in the medical profession. We would not expect the general practitioner who is advising Mrs. Bloggins about her cold, her varicose veins, her limp, her tiredness—a thousand different ills—to turn up and do a heart-lung transplant. We would, however, expect a surgeon who does heart-lung transplants, hip operations or lip operations day in, day out to be a skilled operator.
We do not say, "Let us abolish the rank of consultant" or "Let us abolish the rank of surgeon" because the general practitioner is as able as any surgeon or consultant to operate or give detailed advice. That would be nonsense, and we should adopt the same approach to solicitors and banisters. The barrister is the surgeon who operates in court; the barrister is the consultant. The solicitor is the general practitioner. That is the system which the Lord Chancellor is seeking to overthrow, and that is the reason why we should seriously consider whether his salary ought to be paid at all, let alone increased.

Mr. David Martin: Can my hon. and learned Friend explain why in Truro and Barnstaple rights of audience are already equal for solicitors and barristers? Are people in those areas getting a poor service from solicitors?

Madam Deputy Speaker: Order. I should be obliged if the hon. and learned Gentleman would not go down that path. The scope of the debate is very narrow. May I remind the House that it should be addressed to the merits of the increased salary levels specified in the draft order?

Mr. Lawrence: Solicitors do not operate the same code as barristers. Solicitors take statements from——

Madam Deputy Speaker: Order. I have called the attention of the hon. and learned Gentleman to the scope of the debate. I am sure that he will not ignore guidelines from the Chair.

Mr. Lawrence: I have those guidelines constantly in mind, Madam Deputy Speaker, but to save time I will not repeat them every time I start a new sentence. I am saying that any changes in the visiting system whereby solicitors can take statements from witnesses and barristers cannot —which means that the present way of conducting criminal trials in particular is the best way of achieving high quality and high representation—should not be changed by the Lord Chancellor. When we decide whether his salary is appropriate, we must give that matter consideration.
Barristers are forbidden to take statements directly from witnesses. If a solicitor were able to appear in the higher court and take statements directly from witnesses, the temptation to tarnish the purity of a legal system,


which means that the integrity with which we conduct our criminal trials is of the highest, is a risk simply not worth taking.
A ruthless professional code maintains the integrity of our Bar. The barrister is watched by the solicitor, and by the judge; he dare not do anything wrong. But no one will know whether the high street solicitor who is taking a statement from the witness is doing wrong or right.
The integrity of that aspect of the system has nothing to do with the inherent integrity of a barrister and that of a solicitor, but everything to do with a system that encourages the right approach; and that system is under threat. The professionals—the judges in their Lordships' House—know the dangers of the proposed changes.
Many things are wrong with the legal system. Much could be done to improve it, but tearing the legal profession up by the roots will not solve any of the problems that face our constituents as consumers. They want greater access to legal aid, and to be able to go to a court on a particular day for a particular case and be sure that it will come on. If we want to achieve that, we need computers everywhere, and we need to make sure that the Lord Chancellor's office improves the administration of our courts. Those are the solutions to the problems that concern our people.
Nothing that is suggested in the Green Papers—whether it is replacing the system of payment by a win at all costs proposal, or stripping conveyancing away from the country solicitors so that they are no longer available, or taking away the independence of the Bar by shrinking it so that it is not available or is available only at increased costs, because those costs have to include pensions, overheads, holidays with pay and a car—will set right what is wrong with our legal system.
Because the Lord Chancellor is proposing destructive measures rather than such constructive measures as the extension of the legal aid system to those who need it or the improvement of the administration of our courts, I invite my colleagues on both sides of the House to consider carefully whether this is not the moment to show the Lord Chancellor that we are not as enthusiastic about his Green Papers as he appears to be. He is so enthusiastic that precious little time is being given for consultation——

Madam Deputy Speaker: Order. This is the third time that I have got to my feet to remind the hon. and learned Gentleman that this is not a debate on the Green Papers. For the third time, I am telling him that he must contain himself and speak to the order before us, and not stray from it.

Mr. Lawrence: The order concerns an increase in the salary of the Lord Chancellor. If he is making proposals that will make legal services less available to the consumers and at a higher cost and lower quality, surely we are able to say that he ought not to be entitled to this increase in salary, and so I say.

Madam Deputy Speaker: Order. Not in this debate. The hon. and learned Gentleman has made an extensive speech, and covered a great deal of ground. Other hon. Members wish to speak, so I should be glad if he would refer to the order.

Mr. Lawrence: I said, "and so I say" and that was the end of my speech.

Mr. Bob Cryer: The hon. and learned Member for Burton (Mr. Lawrence) will have an opportunity to vote against the order, and it will be interesting to see what action he and other barristers in the House take.
I am not opposed to the order on the ground that the activities of the Lord Chancellor are necessarily wrong. I do not share the view of the vested interest expressed by the hon. and learned Gentleman. I am opposed to it because it proposes a salary of £91,500 for an individual, which is far too much. It demonstrates the massive inequality in our society when one bears in mind that, about 12 months ago, the House passed orders cutting housing benefit and income support, and that child benefit has been frozen for two years. Someone who has the patronage of the Prime Minister, who has been endorsed and appointed by the Prime Minister, is to be given such a salary because there must be a differential of £2,000 over the salary of the Lord Chief Justice. What a load of nonsense it is to the millions of people who are suffering under this Government because of cuts in a wide range of supplementary benefits, and because pensioners were so badly hit by the cuts——

Dame Elaine Kellett-Bowman: Is this in order?

Madam Deputy Speaker: Order. I shall call any hon. Member to order, whether he speaks from the Government or the Opposition Benches, if he or she strays. I ask the hon. Member for Bradford, South (Mr. Cryer) to confine himself to the order that is before the House, which concerns the merits of the proposed increase for the Lord Chancellor.

Mr. Cryer: I endorse your view, Madam Deputy Speaker. If I make a comparison between the poverty-stricken levels of benefit that the Government are paying——

Dame Elaine Kellett-Bowman: Oi!

Mr. Cryer: I am getting back my breath after hearing the rude noises that have come from the hon. Member for Lancaster (Dame E. Kellett-Bowman), who has been shouting at you, Madam Deputy Speaker, in what I would describe as an undignified way. I would like to defend you against these incursions, Madam Deputy Speaker.

Dame Elaine Kellett-Bowman: May I say with respect, Madam Deputy Speaker, that, while you were quite properly speaking to the Clerk, I was seeking to draw attention to the fact that the hon. Member for Bradford, South (Mr. Cryer) was straying vastly from the point? That is what I was seeking to bring to your notice, Madam Deputy Speaker.

Mr. Cryer: I was seeking to clarify your useful ruling, Madam Deputy Speaker, by referring to the massive inequalities that are imposed on the poorest of our people by the Government. That can he referred to in passing by way of explanation. Having done so, I wish only to say that the Lord Chancellor is not worth £91,500. It is an outrage and a disgrace that anyone who secured his job through patronage should be paid such a sum. The Lord Chancellor's job was not advertised and he did not go through the interview process to which ordinary people have to subject themselves. It is because he happens to


have the beneficial eye of the Prime Minister upon him that it is proposed to pay a massive sum to keep him ahead of the salary of the Lord Chief Justice. That shows to ordinary people that we are engaged in the economics of the mad house.
I propose to divide the House on the order when the Question is put. All those, including the hon. and learned Member for Burton, who wish to vote against it will have that opportunity. We shall see what the outcome is.

Mr. Ivor Stanbrook: It would be wrong and deplorable if it were thought by the public that the sentiments of the Bar were adequately conveyed by the remarks of my hon. and learned Friend the Member for Burton (Mr. Lawrence). Many members of the Bar support what the Lord Chancellor is attempting to do.
I have been a member of the English Bar for nearly 30 years during which time there have been five or six Lord Chancellors. Every one of them until the present one has sat on proposals for reform. The Bar knows that reform is urgent and that its privileges rather than its excellence sustain its position and status in society. As time has passed that has become increasingly the position. The only thing that should guarantee the status of the independent Bar of England is its quality and its excellence. It does not need the artificial privileges which it has secured over the years because of the way in which it has been able to persuade Lord Chancellors and other judges.
It is said by those such as my hon. and learned Friend the Member for Burton that the Bar is opposed to the Lord Chancellor and what he wishes to do by way of reform. The present Lord Chancellor came to us like a breath of fresh air in a fetid atmosphere. He is proposing to do something which previous Lord Chancellors have not had the courage to do. He is worth every penny of the proposed increase.

Mr. Alex Carlile: Before the Lord Chancellor can be worth an increase in salary, he should put his house in order. I am speaking not about anything to do with the legal profession but about the processes of the courts and of the Lord Chancellor's Department.
The legal profession is sometimes accused, rightly—usually the blame falls on solicitors—of holding up the process of justice. However, many of the most worrying delays in that process are caused in the courts administered by the Lord Chancellor. For example, a constituent of mine, a boy with no previous convictions aged about 19, was convicted of an offence of arson. He applied for leave to appeal against his sentence, which was 15 months youth custody. By the time his application for leave to appeal had been rejected in what is not much more than a paper procedure carried out by a single judge, he was one month from his parole. It is unforgiveable that such delays should exist in the administration of justice.
I shall give another example of why, before tearing the profession apart, the Lord Chancellor should rip up some of his procedures in his Department and the courts and start again. In most magistrates courts, because of the blockage of work, both an accused person who chooses, as is his right, to have contested committal proceedings in a

criminal case, and the prosecution—they are affected equally—will have to wait months for the proceedings to take place.
What are the consequences? Every case that comes before a jury depends on a question something like, "Who killed Cock Robin?" Who was standing at the bus stop at half-past five on the afternoon in question? Who signed the document in question? What was in his mind at that time? It all depends on the credibility of witnesses. If these cases have to linger before they are heard, how can juries be expected to make reliable judgments on the credibility of witnesses?
The Lord Chancellor's salary, like, apparently, the salaries of everyone else at which the Government look closely, should be related in some way to his Department's efficiency and performance. Despite the considerable efforts of the Lord Chief Justice, the Master of the Rolls, Lord Justice Watkins and the judge in charge of the civil lists to hasten proceedings, the efficiency of the Lord Chancellor's Department as expressed through the speed of the courts is not very good and certainly does not justify such a large increase in salary.
The Lord Chancellor's aim, and presumably the justification for increasing his salary, on the ground that he is becoming more effective, is to make the law more accessible to the consumer. The hon. and learned Member for Burton (Mr. Lawrence) started on an interesting little list when he was talking about the provincial solicitor. He said that the provincial solicitor advises the consumer on all sorts of matters—I think that the hon. and learned Gentleman mentioned probate, matrimonial law, conveyancing——

Mr. Lawrence: Divorce.

Mr. Carlile: Matrimonial law includes divorce. It is a long time since the hon. and learned Gentleman did a divorce case.
Then the hon. and learned Gentleman ran out of subjects. He did so because the Lord Chancellor in his Government is failing in the most obvious method of bringing the law closer to the consumer. The consumer should be able to obtain a solicitor's advice if he is sacked from his job and wants to go to an industrial tribunal. The consumer should be able to obtain a solicitor's advice freely if he has problems with the Department of Social Security. Those are just two examples.
The consumer should be entitled to legal aid if he has been defamed. We can test the Lord Chancellor's efficiency by the accessibility to the courts that he is giving the ordinary consumer. An obvious way of achieving that, which would earn him a much bigger increase in salary, would be to change the mingy legal regulations that the Government are imposing, rather than tearing up the professions.

Sir Nicholas Fairbairn: I do not wish to stray from the matter, but I must point out that legal aid provisions are nothing to do with the Lord Chancellor's Department. Matrimonial law is to do with the law of marriage and children and the law of divorce is called consistorial law.

Mr. Carlile: The Lord Chancellor's efficiency is apparently being judged by his own lights, in the accessibility to the law that he gives to the consumer.
Now let us assume for a moment that the Green Papers are turned into legislation in some way in the next Session.
Despite what I have said so far, in that event it seems that the Lord Chancellor will be given far too small a salary increase. If the Green Papers become law, he should be given far more; for look at the extra burden that he is taking upon himself. He is taking control of the ethics of the legal profession. No Government in the history of the country—apart for the Government of Oliver Cromwell, if they merit the name Government—have sought to take control of the ethics of the legal profession. If the Lord Chancellor is to take that responsibility on himself and if the Government intend to destroy the independence of the Bar and other advocates by telling the profession what its professional ethics should be, he probably merits £10,000 more a year in his salary for the extra responsibility involved.
I venture to suggest that when there has been mature reflection, the Government and the Lord Chancellor—who is a thoughtful man—will decide that it would be a dangerous step for the Government to dictate to lawyers whether, for example, they can cross-examine police officers, or whether they will be able to exercise the independence shown in the constituency of the hon. Member for Bolsover (Mr. Skinner) during the miners' strike, as independence that barristers exercised so effectively in cases concerning miners. The hon. Gentleman knows that well.

Mr. Skinner: Name one.

Mr. Carlile: I can name barristers who stood for the independence of the people whom his union supported in the miners' strike—such as Ms. Lang, a member of my chambers—and who supported by their independent advocacy the miners of his constituency. If the Government take over the professional ethical code of lawyers——

Mr. Skinner: Will the hon. and learned Gentleman give way?

Mr. Carlile: No, because the hon. Gentleman has had his shout[Interruption.]

Madam Deputy Speaker: Order.

Mr. Carlile: If the Government take over the professional ethical code of barristers——

Mr. Skinner: Will the hon. and learned Gentleman give way?

Mr. Carlile: I may give way to the hon. Gentleman if he shows some evidence of listening. If the Government take over the professional ethics of barristers, that is one step down the road of tyranny. It may be a tyranny that the hon. Gentleman's brand of Socialism will welcome. I am very suspicious about it and I am surprised that real Tories are willing to go down that road.

Mr. Skinner: There used to be a story, which the hon. and learned Gentleman destroyed tonight, if it had not already been destroyed, that members of the old Liberal party were radicals, or "wadicals" as "Woy" used to call them. The hon. and learned Gentleman now says that it is all right to hammer the dockers and every working class group in England but that the lawyers must be left alone.

Dame Elaine Kellett-Bowman: On a point of order, Madam Deputy Speaker. What have the dockers to do with the Lord Chancellor's salary?

Mr. Carlile: I do not think that I mentioned the dockers, but let me clarify what I am saying to the hon. Member for Bolsover. It is important to leave the independence of lawyers alone and not to take them under Government control.
There is another reason why the Lord Chancellor may need an increase in salary. His job as a judge will be that much more difficult. The proposals in the Green Paper would entitle lawyers to full advocacy certificates not on the basis of their competence there would be no test of competence—but because they had stood up in court and done a given number of a particular type of case, however, badly. That is what the Green Paper amounts to: there is no quality control whatever. Judges in this country—the Lord Chancellor earns his salary as a judge, the head of the judiciary—depend upon receiving guidance as to the applicable law from those appearing in front of them. If the quality of those appearing in front of them is not as rigorously controlled, both by competence and the market, as it is at the moment, we shall have a judiciary that is embattled, oversized and probably therefore less competent. The Lord Chancellor's budget will increase exponentially and that, I suppose, will force us to recognise, on that cynical basis, that he will have to be given an increase in salary.
I trust in what we heard from the Lord Chancellor in the other place last Friday, that if there is to be legislation in the next Session, careful consideration will be given to all the points put before him. If he is to be worth the salary that will, no doubt, be voted to him tonight, he must pay careful attention to those points and, above all other things, to the independence of the law.

Mr. Tim Devlin: I feel compelled to speak because of what I have heard from other barristers on both sides of the House.
I shall support the order increasing the Lord Chancellor's salary, although I fully agree with the hon. and learned Member for Montgomery (Mr. Carlile) that there are failings in the Lord Chancellor's Department. I shall support the increase because the present Lord Chancellor is the first since the 1980s to make the people and the legal profession respectively sit up and think about what they want from the profession and how consumers' needs can best be met.
One important point seems to have been overlooked in the debate. The Lord Chancellor merits his salary because he has written three excellent Green Papers. I hasten to add that they are all green, which means that they are all being consulted upon. It can only be a welcome development for this country to discuss what we expect from our lawyers and how they ought to deliver their services.
There are many ways in which the present legal system is inadequate. Access to the Bar is at present pitifully small. When I was a young barrister—no, I am still a young barrister. When I was training there were 113 people on my course, but a mere 23 got pupillage. Of those, only four got chambers and those four were sons of judges or banisters who were already in Chambers. We must look at the way in which access to the Bar is awarded. It would be most welcome if people could become solicitors more easily and compete with those whom the


Bar has selected as being the most appropriate people, so that those who are the best advocates can represent the public.
Much has been said about the Lord Chancellor not meriting his salary because of the effect of the Green Papers on the Bar. But why is it expected that the Bar will disappear? Have we no confidence in our Bar and in its containing the finest legal professionals available?
About 80 per cent. of solicitors in this country are in partnerships of fewer than four people. All those solicitors, throughout the country, will need specialists on whom they can call, so there will be a market for the Bar. Why, therefore, is it assumed that all the barristers will be snapped up by big firms in the City? Large firms such as Coward Chance have already said that they are not interested in entertaining the prima donnas of the Bar. They are not interested in paying the sort of salaries that those at the top of the specialist Bar want to command and they are not interested in recruiting those who are not specialists.
The most important thing about the proposals in the Lord Chancellor's Green Papers has been the welcome fact that for the first time we are talking about the legal system meeting the needs of the consumer. Until recently the word "consumer" never appeared in the legal profession, but surely the whole system should be pointed towards the consumer. Many consumers who come to my surgeries seem to think that the legal process in this country is a lottery in which only the rich or the most determined take part, and I think that they are absolutely right. I hear nothing from my constituents about the legal system, apart from the fact that it is uncertain and that it takes a long time.
Most ordinary people do not think that the present legal system with its two tiers of solicitors and barristers is meeting their real needs in the best and most appropriate way. We all know that at the junior end of the Bar the consumer is being asked to pay for a two-tier system but is taking delivery of only one tier. When we are instructed to appear in the market towns of England we are given a piece of paper with perhaps little more on it than a chap's name, and we are expected to do what used to be called a "dock brief'—in other words, to find out what the case is about, do the necessary and send the brief back with a suitable fee on it. That is not what the consumer deserves and it is not what the consumer should have. That is why the Lord Chancellor's Green Papers are welcome.

Sir Nicholas Fairbairn: I am horrified that the law of England still has barristers who, without proper instructions, nevertheless appear for clients, which is in contradiction of their duty. I trust that my hon. Friend never has.
I am interested to know whether my hon. Friend receives complaints about the legal profession at his surgery, as I frequently do at mine, and how many he has had from people who feel that they have been let down by a member of the Bar and how many from people who think that they have been let down by solicitors, who will be all that they have if the reforms are passed.

Mr. Devlin: With the greatest respect, the cases that I have seen are roughly half and half, which is sad.

Mr. Cryer: It is a yawning chasm.

Mr. Devlin: It may be unbelievable to hon. Members in various parts of the House, but the fact is that there are complaints about barristers and complaints about solicitors—perhaps more about solicitors. People do not see the present system as delivering the services that they need.
The Lord Chancellor deserves his salary because he sat down and thought carefully about the future of the Bar. He has made the barristers respond. He has made them think out some good reasons for carrying on in the way that they do. It is very interesting to note, in the Bar's response to the Green Papers, that it is now putting forward a plan for a wonderful new scheme under which a barrister will have to take the next brief, regardless of whether it is a legal aid case, provided that it is within his area of speciality. One Left-wing barrister wrote to me saying how welcome that was. When I was at Bar school —not many years ago—I was told that that rule existed already; it was called the cab-rank rule.
It is about time that we looked carefully at our legal profession. The Green Papers have opened a welcome debate, and in that respect by itself the Lord Chancellor merits his salary.

Mr. Alan Williams: May I say to the hon. Member for Stockton, South (Mr. Devlin) that, after 25 years of dealing with constituency cases, I do not pretend to have a statistical breakdown of the grievances against solicitors and the grievances against barristers. However—and in this respect the hon. Gentleman is right —a point of difference occurs to me immediately: most people making complaints against solicitors turn up at my surgery, whereas those making complaints against barristers normally correspond by letter, by courtesy of Her Majesty.
The first two speeches in the debate—those of the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) and of the hon. and learned Member for Burton (Mr. Lawrence)—gave very different perceptions of the Bar. The hon. and learned Member for Perth and Kinross gave the perspective north of the border. We recognise his particular knowledge and experience there. All that I as a Welshman can say is that I am overjoyed at the thought that a fellow Celt will do a bit better out of the system than perhaps his predecessor managed to do, though both of them seem to be doing pretty well.
I know that the speech of the hon. and learned Member for Burton was intended to be dispassionate and objective. That is why he did not declare an interest. Perhaps it is well that we have a special exemption for lawyers during the next couple of months, because it would take up too much of the time of this House if every lawyer speaking had to declare his interest before getting down to what he wanted to say. There is quite a substantial built-in lobby in the House. However, I watched the departures, and, having heard the hon. and learned Gentleman make his case, and having watched that case gradually disappear, I became increasingly convinced of the irrelevance of barristers in a successful court case. I started off far more sympathetic to the cause that I think the hon. and learned Gentleman was advocating than I was by the time he had finished his advocacy. Indeed, he put forward some rather novel propositions. I had to pass a tissue to my hon. Friend the Member for Bolsover (Mr. Skinner) when the hon. and


learned Gentleman was talking about all the poor barristers who will be homeless. The solicitors will have roofs over their heads, and they can have cars, but the poor barristers will be under the arches.

Mr. Skinner: Yes, in those cardboard boxes.

Mr. Williams: That is right, under the arches, in cardboard boxes.

Mr. Lawrence: The hon. Gentleman has missed the point. The point is that, under these Green Paper proposals, the cost of a barrister will rise to pay for overheads—cars, pensions, holidays with pay—so that the cost to consumers will rise. The barristers will be in clover because they will be working for firms of solicitors, with steady, substantial incomes guaranteed against inflation. That is the point. It is much more in our personal interests to have the Green Papers than not to have them, but it is in the interests of the country not to have them.

Mr. Williams: I congratulate the hon. and learned Gentleman on the fact that he managed to convey, in his second presentation of his case, a degree of clarity that he failed to achieve in his first presentation. Indeed, on the first occasion he became so preposterous that he could even envisage a situation in which someone would ask for the assistance of the hon. and learned Member for Perth and Kinross before the courts. I should have thought that that was self-evidently irrelevant, in that such a person could get off on the grounds of diminished responsibility.
The basic proposition of the hon. and learned Member for Burton was strange. He said that the Lord Chancellor should not have an increase in salary because he was upsetting the legal profession. I hope that tomorrow when my hon. Friends the Members for Bolsover and for Bradford, South (Mr. Cryer), always aware of the mood of the House, table a motion that the Secretary of State for Health should have a reduction in salary because he is upsetting the doctors and a motion that the Secretary of State for Education and Science should have a reduction in salary because he is upsetting the teachers the hon. and learned Gentleman will be the third person to sign them.
There will not be an official Division on this issue, but we are an independent-minded party. The Lord Chancellor has been berated by his honourable colleagues because he is trying to attack the restrictive practices in his profession. In the 1970s a commission was set up to look into restrictive practices in the legal profession. It is recorded in the minutes that the secretary of the Law Society came before it and said that all the restrictive practices were in the public interest. Imagine if the National Union of Mineworkers or the Transport and General Workers Union put forward such an outrageous proposition.
The Lord Chancellor deserves some credit for opening up issues that need to be discussed. At least he has opened a public debate, not one in a closed group or for a small select commission. We all have a right and an opportunity to take part. We shall be convinced even further of his genuineness if he now gets rid of another restrictive practice, the strange one that we are debating here tonight.
There seems to be no logic whatever to defend the principle that the Lord Chancellor should have £2,000 more than the head of the judiciary, the Lord Chief Justice. The argument is that it is necessary because he is the head of the legal system. The Prime Minister is head of the Civil

Service, yet she receives £21,000 less than the permanent secretary, or the official head of the Civil Service. The Secretary of State for Defence is the ultimate decision-taker for the military services, yet he receives £34,000 less than the Chief of the Defence Staff. Any Secretary of State receives far less than his permanent secretary. Where, then, is the logic?
I remember when I was Minister of State at the Department of Prices and Consumer Protection and the head of my private office was leaving. The morning he was leaving he said, "I have not dared tell you previously, but tomorrow, when I take up my new job as a senior principal, I will be receiving £600 a year more than you are receiving as Minister of State."

Mr. David Ashby: The hon. Gentleman is right. The Secretary of State for Defence does not lead the troops in battle, but the Lord Chancellor sits as a judge. Is the hon. Gentleman aware of that? He is a judge and assists as a judge in the House of Lords.

Mr. Williams: I do not remember—perhaps the hon. Gentleman will remind me—when the Chief of the Defence Staff has led any troops into battle. The moment that the hon. Gentleman can convince me that that is the case I will concede that he has made a point. It is absurd that the Lord Chancellor receives £37,000 more than the Speaker of the House, who also has responsibilities—within his salary payment—as a Member of Parliament.

Mr. Cryer: Our usual experience of defence chiefs of staff is that they lead their cronies into the board rooms of companies that supply the Ministry of Defence with very large contracts.

Mr. Williams: The fringe benefits are considerable, but one can do even better if one is a failed Chancellor of the Exchequer.

Mr. Cryer: There is one coming up now.

Mr. Williams: That is right. There is another one in line. The City of London pays them very well and, indeed, ex-Secretaries of Defence. Lazards could not get its hands on one quickly enough.

Sir Nicholas Fairbairn: As the hon. Gentleman probably wants an answer to his question, I can tell him that I believe that the last Chief of the Defence Staff to lead his troops into battle was Butcher Cumberland, who did us such harm in Scotland.

Mr. Williams: In that case, I think that the hon. and learned Gentleman will concede that the argument put forward by his hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) hardly has much relevance in today's circumstances.
Several hon. Members have referred to the question of relating the pay to productivity and performance. No one will pretend that there is an easy measure, but let us look at the simple fact that in the past five years—since December 1983—the Lord Chancellor, with this increase, will have received increases in his salary of 56 per cent., 11 per cent. a year. We all know that throughout that time the conditions in our prisons, especially of remand prisoners, have been getting worse and the delays in having cases dealt with have been getting longer.
Until last year the explanatory note used to contain the following sentence:
The salary quoted represents a maximum and may not be the actual salary claimed.
In other words, some previous Lord Chancellors did not claim their full salary. I believe that, in the mood of the Lord Chancellor's proposals for a complete review of the restrictive practices within the legal profession, it would be suitable for this Lord Chancellor to say that he, too, would not accept, even though it has been granted—as his predecessors reserved the right to say—the increase until the waiting lists have been eliminated.

Question put:—

The House divided:Ayes 110, Noes 7.

Division No. 152]
[12.22 am


AYES


Amess, David
Chope, Christopher


Amos, Alan
Coombs, Anthony (Wyre F'rest)


Arbuthnot, James
Coombs, Simon (Swindon)


Arnold, Jacques (Gravesham)
Cran, James


Ashby, David
Davies, Q. (Stamf'd &amp; Spald'g)


Atkinson, David
Day, Stephen


Baker, Rt Hon K. (Mole Valley)
Devlin, Tim


Baldry, Tony
Dorrell, Stephen


Batiste, Spencer
Dover, Den


Bennett, Nicholas (Pembroke)
Durant, Tony


Boswell, Tim
Fallon, Michael


Bowis, John
Favell, Tony


Brandon-Bravo, Martin
Fearn, Ronald


Brazier, Julian
Fishburn, John Dudley


Bright, Graham
Forman, Nigel


Brooke, Rt Hon Peter
Freeman, Roger


Buck, Sir Antony
Gale, Roger


Burns, Simon
Garel-Jones, Tristan


Burt, Alistair
Gill, Christopher


Butterfill, John
Glyn, Dr Alan


Campbell, Menzies (Fife NE)
Greenway, John (Ryedale)


Carlile, Alex (Mont'g)
Gregory, Conal


Carrington, Matthew
Griffiths, Sir Eldon (Bury St E')


Chapman, Sydney
Griffiths, Peter (Portsmouth N)





Hague, William
Neubert, Michael


Hamilton, Neil (Tatton)
Newton, Rt Hon Tony


Hanley, Jeremy
Nicholls, Patrick


Hargreaves, Ken (Hyndburn)
Nicholson, David (Taunton)


Harris, David
Oppenheim, Phillip


Hayward, Robert
Paice, James


Heathcoat-Amory, David
Porter, David (Waveney)


Howarth, G. (Cannock &amp; B'wd)
Powell, William (Corby)


Hughes, Robert G. (Harrow W)
Raffan, Keith


Hunt, David (Wirral W)
Rathbone, Tim


Hunt, John (Ravensbourne)
Redwood, John


Hunter, Andrew
Rost, Peter


Irvine, Michael
Ryder, Richard


Jack, Michael
Sackville, Hon Tom


King, Roger (B'ham N'thfield)
Shaw, David (Dover)


Latham, Michael
Shaw, Sir Michael (Scarb')


Lightbown, David
Smith, Tim (Beaconsfield)


Lilley, Peter
Spicer, Michael (S Worcs)


Lord, Michael
Stanbrook, Ivor


Lyell, Sir Nicholas
Stern, Michael


MacGregor, Rt Hon John
Stevens, Lewis


Maclean, David
Stradling Thomas, Sir John


McLoughlin, Patrick
Summerson, Hugo


McNair-Wilson, Sir Michael
Taylor, Ian (Esher)


Mans, Keith
Taylor, John M (Solihull)


Martin, David (Portsmouth S)
Thurnham, Peter


Mates, Michael
Waddington, Rt Hon David


Mayhew, Rt Hon Sir Patrick
Wakeham, Rt Hon John


Miller, Sir Hal
Widdecombe, Ann


Mills, Iain



Mitchell, Andrew (Gedling)
Tellers for the Ayes:


Mitchell, Sir David
Mr. Alan Howarth and Mr. Kenneth Carlisle.


Moynihan, Hon Colin



NOES


Barnes, Harry (Derbyshire NE)
Wareing, Robert N.


Hughes, John (Coventry NE)



Lewis, Terry
Tellers for the Noes:


McAvoy, Thomas
Mr. Bob Cryer and Mr. Dennis Skiner.


McKay, Allen (Barnsley West)



Nellist, Dave

Question accordingly agreed to.

Resolved,
That the draft Lord Chancellor's Salary Order 1989, which was laid before this House on 14th March, be approved.

Medicines (Fees and Charges)

The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): I beg to move,
That the draft Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Order 1989, which was laid before this House on 20th March, be approved.
The order is made under section 102 of the Finance (No. 2) Act 1987. Its purpose is to provide the legal basis for making regulations to enable the full costs of the licensing agency to be charged out to the industry through licence and other fees.
To that end the order lists in schedule 1 the functions of Ministers to be taken into account in fixing fees. The schedule refers to the relevant parts of the Medicines Act 1968 that set out the powers and duties in question. Broadly speaking, they cover the licensing functions, including pre-licensing clinical trials, and also post-marketing surveillance, inspection, enforcement, the regulation of advertising and labelling, and the classification of medicines—that is, whether a drug is available only on prescription.
Schedule 2 to the order sets out the matters which can be taken into account in setting fees. The objective is to secure that all the costs of discharging the functions in schedule I can be taken into account in fixing fees. This includes the power to take account of deficits in fee income against expenditure so that a deficit in one year can be recouped in a subsequent year. It is intended that Ministers should also be able to take into account surpluses, so that any excess income can be offset by lower fee income in a subsequent period.
The fees regulations—the Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Regulations 1989—were laid before the House on 10 March 1989, and are not the subject of debate tonight. They set out the definitions of the various types of licence applications and inspections and the levels of fees which are prescribed. The new fee structure is considerably more complex than the one it replaces. The new range of fees is very wide, from £40,000 for a major new drug application through to £50 for administrative modifications to licences involving no professional assessment. Some new fees have been introduced and some existing fees have been split so as to reflect the different workloads involved in assessing the different types of application.
One major change in the new structure is the abolition of the requirement on companies to pay an annual fee related to turnover. The annual fees have in recent years amounted to about 85 per cent. of the total fee income. We argue that their abolition is necessary because of the Government's view that self-funding public bodies should charge fees that broadly reflect the costs of the services or other activities for which the fee is charged. In the case of annual fees related to turnover, any correlation is regarded as insufficient in a timely sense. That is because the fees are paid over a number of years.
Abolition of the annual fees necessarily means that there has to be a very considerable increase in the application fees to make up the shortfall as well as provide the extra resources necessary to cover the whole rather than two thirds of the costs of the agency. The fee levels proposed are intended also to strengthen the staffing of the agency to enable it better to tackle the heavy workload,

including the very considerable backlog in the handling of product licence applications that has built up. The total costs of the agency in 1989–90 are expected to be about £11·5 million.
The new fees set out in the regulations have been the subject of statutory consultations with the industry. The increases in fees proposed are not welcome to some parts of the industry and particularly to the smaller firms. I recognise fully their concerns and understand them. However, I ask them to remember that the increase in application fees is partly the result of the abolition of the annual turnover fees. Looking to the longer term, I believe that the decision that the funding of medicines control should be met by the industry through fees will prove to be strategically the right choice. It provides a basis on which this work can be resourced separately from the rest of the work of the Department.

Mr. Roger Gale: Can my hon. Friend give the House an assurance that the increase in fees will be met by a commensurate reduction in the waiting time for the processing of applications?

Mr. Freeman: I cannot give that assurance in as direct a form as my hon. Friend would want, simply because there was a substantial increase in the number of applications before the end of the last financial year by companies seeking to take advantage of the lower fees that then prevailed. It will take some time to work through that case load. However, because those applications were being brought forward from this financial year, we anticipate that the level of applications this year will be slightly lower than anticipated, so we shall clear the backlog fast.
I can assure my hon. Friend that the principle of increasing fees to cover the costs involved and increasing fees to cover the costs of a 10 per cent. increase in staff in the Medicines Control Agency should eat into the backlog, about which I am as concerned as he is.
Achieving real improvements in the time taken to deal with licence applications will represent a good investment for the industry. While it inevitably has to put the money up front before better performance can be attained, the new arrangements certainly hold out better prospects than hitherto for delivering improvements. I commend the order to the House.

Ms. Harriet Harman: I should like to ask the Minister six questions and the first is about the openness in practice. Obviously we welcome the fact that the scale of payments will be made public. Will the accounts of such payments be made available every year in sufficient detail to allow public and parliamentary scrutiny? That would give us the assurance that the new scheme is effective and that the funding is sufficient to allow the proper implementation of the appropriate regulations.
My second question is about what will happen in 1992. If payments fall drastically in that year, following the introduction of unified EEC drug licensing arrangements, and payments go to Brussels rather than to the Medicines Control Agency, will money still be directed to the agency so that it can carry out the essential policing duties that the Minister has mentioned?
Thirdly, it is clearly the intention that the phamaceutical industry will pay for the order and that the changes will


save public money. How much does the Minister anticipate will be saved and to what ends will the savings be put? Will they be used for research or will they simply drift back to the Treasury?
Fourthly, it has been said that, because the regulatory agency will be directly financed by the pharmaceutical industry, he who pays the piper will be able to call the tune. Is the Minister satisfied that the agency will be sufficiently independent even though it will be entirely financed by the industry that it is regulating?
Fifthly, will the industry be able to set against profits the payments that it makes to the agency for the purposes of the industry's returns under the pharmaceutical price regulations scheme? The Government are asking the industry to give money to the agency and if they then subsidise the industry for that payment through the mechanism of the pharmaceutical price regulation scheme, I am not sure where that leaves us in terms of saving public money.
My sixth question is about the pharmaceutical price regulation scheme and the savings that the Government intend to make under the indicative drugs budget. As the House will know, there has been much concern among GPs about the savings that the Government intend to make in the indicative drugs budget. Will not whatever marginal savings are made by GPs by paring at the edges of their drugs budget be clawed back by the drug companies through the pharmaceutical price regulation scheme and will not the companies be able to show that their guaranteed level of profit has not been met? Will the Minister say how much he expects to save in the indicative drugs budget? Will there be a net saving or will the saving be clawed back under the pharmaceutical price regulation scheme?

Mr. Peter Rost: I speak on behalf of the manufacturers of herbal medicines represented by the Natural Medicines Group to which I am a consultant. I also speak as joint chairman of the parliamentary group for alternative and complementary medicine. My hon. Friend the Member for Stafford (Mr. Cash) apologises for not being present for the debate. He is in Europe on parliamentary business and has asked me to say that he supports what I shall say.
The manufacturers of herbal medicines are mostly small companies. They each have many thousands of licensed products which they bring to market, but most of them have a modest turnover. Even the largest herbal manufacturer in the United Kingdom, Weleda (UK) Ltd., employs about 200 people even though it has been growing very fast. Again I declare an interest because that company is in my constituency. Nevertheless, it markets some 5,000 different medical products. It says that the proposed fees are intolerable, and unfair to the smaller manufacturers.
The regulations, as proposed, are not opposed by any responsible manufacturer of herbal products. Such manufacturers support regulation on safety and all other grounds: that is not at stake. They say, however, that the basis of the fixing of fees must be fairer than is at present proposed. One manufacturer says that MLX 175—the

proposed scale of fees—represents an increase of between five and eight times the present fee. That is completely unacceptable.
Let me quote from a desperate letter sent by Potter's (Herbal Supplies) Ltd. of Wigan to my hon. Friend the Minister, dated 31 March. It is not the first letter that that company has sent to him.
your Department has placed before Parliament two vital documents, S.I. 418 and Fees and Charges, both of which will undoubtedly have unprecedented and detrimental effects on smaller pharmaceutical firms—a rise in fees of between five and eight times those paid today proposed in MLX 175 will destroy small businesses … It would seem then that as a company that has made safe herbal medicines for over 176 years, the most serious threat to our existence comes from the Department of Health. The effect of these fees on top of the hugely exaggerated requirements of review to new E.C. standards will result in job losses and lack of competitiveness —leaving the U.K. market place for 'green' natural medicines to our European partners.
We hope that as Minister responsible, you will make time to understand our problems by seeing members of our trade organisations before enacting these statutory instruments.
I expressed concern to my hon. Friend on 25 February. He replied most courteously, confirming that a joint consultative group had been set up to administer the proposals. The members of the manufacturing group of the Natural Medicines Group, however, say that they have not been consulted, although the Minister has confirmed that their pleas have been taken into account—or so we are told. If "taking their pleas into account" means imposing increased fees of between five and eight times their existing fees, that is a form of consultation that they do not regard as entirely satisfactory, and I think that the House will agree with them.
The chairman of the largest manufacturer of herbal products in my constituency, Weleda, also wrote to my hon. Friend, on 30 March. The letter reads:
Whilst I note that in your letter you state that 'the Agency has no wish to close down small companies', I am gravely concerned that the implementation of Statutory Instrument No. 418 will indeed have that effect on Weleda (UK) Ltd. This is because we, as a small company, will be required to pay a greatly increased level of fees for the specialised products we manufacture, which do not have large turnovers.
Closure of Weleda (UK) Ltd. would not only mean the loss of over 100 jobs in a area which has suffered high unemployment, but also, because Weleda is the sole manufacturer in the U.K. of anthroposophical medicines, it would mean that there would no longer be any source of supply of these medicines for doctors, hospitals, clinics, pharmacies and the general public.
I therefore write to ask for your assurance that the regulations as laid down in Statutory Instrument No. 418 are not implemented until there has been further consultation with small, specialised pharmaceutical manufacturing companies such as Weleda (UK) Ltd.
My hon. Friend the Minister has yet to reply to that letter. That is understandable—it is dated 30 March.
The proposed structure of fees is unacceptably unfair. We hope that the quango that has been set up to administer the fees will be properly regulated by my hon. Friend the Minister. I was not re-elected to the House to support a radical Government, whose policies have, on the whole, been aimed at reducing red tape and encouraging enterprise and small business, to find now that we are moving in a reverse direction with these smaller entrepreneurial companies. They appear to be setting up a bureaucratic structure, which perhaps my hon. Friend has not had the time to investigate fully to assure himself that we are doing this the right way. I urge him to have another look at this to make sure that there is not a better way to


organise this that would be fairer to the small manufacturers. They should be consulted and I hope that my hon. Friend will allow me to help with those consultations.
It is easy enough for the larger pharmaceutical groups to face these fees. Proportionately, the fees are much smaller for them, so they are quite happy. No doubt they were consulted. They have huge resources, huge profits, far bigger sales and fewer products. The scale of fees is not being based on turnover, as we were originally assured that they would be, so the larger pharmaceutical groups will come out better off than they were. Smaller manufacturers —I am speaking only of the herbal manufacturers, as I do not know about the others—are coming out far worse.
I have a final quote from the Natural Medicines Group, which represents the herbal manufacturers. This letter asks me to make representations on the group's behalf. It says:
we need to modify this S.I., failure to do so will cause more harm to the herbal industry than almost any other requirement so far. It is of course even more dramatic because many small companies now being asked to increase their payments have also had their most expensive last couple of years, trying to satisfy the unrealistic requirements of review.
As you know, the Natural Medicines Group and its members are dedicated to a sensible licence structure and the public protection that this gives. The result of this 'last straw' in increased fees will result in many products being taken out of licensing and what then for consumer protection?!!
I urge my hon. Friend to allow further time for consultation, particularly on the way that the fees are to be implemented and their allocations, so that we can devise a fairer system that will allow the smaller manufacturers of pharmaceutical products—again I speak only about those I know—to survive without being so unfairly penalised.

Mr. Ronnie Fearn: The order relates to the
Fixing of Fees Relating the Medicinal Products for Human Uses".
Following the questions asked by the hon. Member for Peckham (Ms. Harman), I have several questions. What human reaction has there been from manufacturers and from the Pharmaceutical Society of Great Britain? It seems that this is a cost-efficiency exercise, which shows that fees have increased greatly above the rate of inflation. How can that be justified?
I realise that there was some sort of ploy in producing first a licence fee for a new product of £50,000, which was then reduced to £40,000. Was there a reason for taking that course, which was a doubling of the present rate? Surely that is inflationary and something that will add to the drugs budget of the National Health Service.
Perhaps the Minister will explain what is meant by a "variation of licence", which will cost much more than hitherto. I believe that he talked of £50. Will the alteration of a label be classed as a variation? What is meant by a "complex variation licence", which will now cost £1,250? If a product's colour is changed, is that classed as a complex variation? The parent Act and the order are far from clear on these matters and perhaps there should be clarification now.
Is the order not a restraint on innovation? Will a producer stop marketing or not bother to market a product which has only a relatively small sale? I shall be grateful if the Minister will give assurances to meet the issues which I have raised.
Finally, can the Minister not envisage that in the end the losers must again be consumers, to whom the increased licence fee costs will undoubtedly be passed by the manufacturers?

Mr. Freeman: This has been a brief but well-informed debate. The hon. Member for Peckham (Ms. Harman) asked me six questions and I shall try to answer them as briefly as I can. The hon. Lady asked whether reports and accounts would be published. The answer is that they will be published annually. They will cover the fees, costs and performance of the Medicines Control Agency.
The hon. Lady asked what will happen in 1992. Additional responsibilities have been placed on the licensing authority through our membership of the European Community. Under Community rules, there is now provision for companies to apply for product licences under the so-called multi-state procedure. In essence, it requires the member states of the Community to reach a common view on licence applications, though, as yet, any such consensus is not binding on member states which remain sovereign in licensing matters. Participation in European Community work is a growing aspect of the work of the licensing authority and will continue to be so, especially as 1992 approaches. The EEC Commission has not yet published its proposals for the completion of internal markets and medicinal products. Proposals could involve national authorities continuing some licensing activities, and these would continue to be financed by fees. If the EEC proposes taking over licensing on a supranational basis, the Commission will have to include some method of financing. Possibly companies would have to pay fees to new supranational agencies for EEC licences as well as some payment to national authorities.
The hon. Member for Peckham asked me about savings being ploughed back. Income in the past financial year went to the Treasury, and the Department of Health bore on its own votes the expenses of the licensing authority. In this financial year the revenue will come to the Department of Health and offset the expenses of the agency. We expect these sums broadly to match each other. As the fees being charged will be greater than hitherto, because we are increasing the charges to reflect more accurately the costs involved, additional fees will be raised from the pharmaceutical industry. These will amount to about £5 million per annum. This sum will go back into the NHS and improve services for patients and, more broadly, for all those who are provided with some form of service by the NHS.
The hon. Member for Peckham asked me whether the piper would call the tune. The new agency, whose new director—Dr. Keith Jones—was appointed today, will be answerable ultimately to Ministers in the Department of Health and in the Ministry of Agriculture, Fisheries and Food. It is Ministers who determine levels of fees and control the agency.
The hon. Lady asked me whether the licence payments could be set against the profits for pharmaceutical price regulation scheme purposes. The answer is yes; it is a perfectly appropriate revenue expense.
The hon. Lady also asked me about indicative drug budgets. The purpose of our White Paper proposal for indicative drug budgets, which will apply to all general practitioners, is to bring downward pressure to bear on


prescribing. It is undoubtedly true that some doctors overprescribe, measured simply against the average rates of prescription for patients. I cannot give the hon. Lady an estimate because we have made none. We aim to eliminate wasteful prescribing; the objective is not to save a specific sum of money.
I appreciate the role that my hon. Friend the Member for Erewash (Mr. Rost) plays in the Natural Medicines Group in his constituency. He raised points about consultation. The order that we are debating is different from the one that sets the fees, and my hon. Friend will have noted that that order was laid before Parliament on 10 March. In December, the Department of Health wrote to every licence holder and we received a substantial number of representations. The fees are being set for one year only and I give my hon. Friend the assurance that we will take into account the experience in the first year. I am not sure that I agree with his estimate of the fees being some five to eight times more than would have applied under the old regime. We are abolishing the annual fee related to turnover and collapsing that fee into the initial up-front fee. In looking at an increase in fees, one must compare apples with apples. There is certainly not a five to eight times increase. There is a joint consultative group which will take representations into account.
I listened to my hon. Friend the Member for Erewash with great interest and care. I am prepared at a time convenient to him to meet him and representatives of the Natural Medicines Group to take into account their concerns and fears. I shall get in touch promptly with my hon. Friend to arrange such a meeting, which I hope will be timely.
The hon. Member for Southport (Mr. Fearn) asked me about representations received from the industry. We have received 78 replies to our letters which were sent out last December, making 121 apparently representative points. We took them into account in setting the fees laid down in the draft order.
The hon. Gentleman asked me about the increases in the rates. Last year and in previous years we were charging or recovering two thirds of the costs of the licensing agency. We now propose to increase that to 100 per cent. and to include in the costs to be recovered a much broader category of costs. We think that that is economic. We shall provide also for recovery of an increase in staff of about 10 per cent. to deal with more applications. The hon. Gentleman asked me a number of other detailed points. I shall read them tomorrow in the Official Report and write to him.
I commend the order to the House.

Question put and agreed to.

Resolved,
That the draft Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Order 1989, which was laid before this House on 20th March, be approved.

Housing and Planning Act 1986

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Dorrell.]

Mr. Peter Thurnham: I apologise for keeping you, Mr. Deputy Speaker, and my hon. Friend the Minister up so late tonight, but the subject of the debate arises from a serious problem in my constituency which I understand occurs elsewhere and requires stronger action by Government and local authorities. I have been fortunate in the results achieved by my previous Adjournment debates, and I hope that this debate will prove to be successful in drawing attention to and doing something about this problem. It is ironic that, at a time when everyone is so concerned about amenity and the environment, I should have to raise a matter of deliberate dereliction.
A constituent of mine, Mr. Robert Horrocks, is a property developer. The filed accounts for his companies are not all up to date, but there is no doubt that he must be one of the wealthiest property developers in the country. Through one of his companies, Metrolands Investments Ltd., he controls a shopping precinct in Harwood, which is in most other respects a very pleasant part of my constituency. The precinct was developed 25 years ago by Metrolands, the freehold being owned by the Liverpool Victoria Friendly Society. Development approval was given by the then Ministry of Housing and Local Government in 1963 to provide what Metrolands called
much needed shopping facilities, where these facilities are virtually non-existent.
The precinct opened in 1965, when it was described as "a housewife's dream". At the time of my election in 1983, it contained about 30 different shops as well as a library. Deficiencies in the structure of the building led to disputes between the tenants and the developer. Those disputes became worse after the freehold was sold in January 1984 by the Liverpool Victoria Friendly Society to Metrolands, accompanied by rumours of redevelopment as the new landlord acted in anything but a friendly way to the tenants.
Later that year, residents in the adjacent Lynwood grove came to see me about the rapidly deteriorating state of the precinct and the provocative and high-handed way in which they were being treated about rights of way at the back of their properties, where boards with sticky black paint had been erected.
On 10 August, I sent the first of many letters and telephone calls to Metrolands. I also wrote to the council and the police. I received a reply from the police, but not from Metrolands.
The following year, the condition of the precinct continued to deteriorate. The traders were refused extension of leases, despite the acknowledged lack of alternative premises. Mr. Horrocks ignored my repeated requests for a meeting. I asked the council for its help in setting up a meeting, again with no response from Mr. Horrocks. I wrote to Mr. Horrocks again in May 1986, referring to compulsory purchase of the precinct. He did not reply, but called without notice here at the House on 21 May, when I was in Bolton for mayor making. I wrote yet again to him on 1 October asking to meet, again with


no reply. Later that month, the council granted an application for outline planning permission for redevelopment, with an additional 2,300 sq ft supermarket.
Early in 1987, I received further complaints from shopkeepers who were concerned about the increasingly neglected state of the area. They were also especially concerned about efforts to obtain vacant possession of the shops by the landlord. Notices to quit were being served on traders whose leases had expired. I endeavoured to obtain a meeting with Mr. Horrocks, but yet again with no success. I then arranged a public meeting in April 1987. Over 200 people attended—but not Mr. Horrocks.
As my hon. Friend knows, following that public meeting, I wrote to my right hon. Friend the Secretary of State on 14 May, and I quote from that letter:
Metroland Developments have put in a planning application to redevelop part of the site, but are not prepared to give any assurances to the existing tenants that they can have continuity of trading in the new development, nor are the owners prepared to give any assurances to the community at large that the provision of services such as a post office and a chemist will be able to continue.
Please find enclosed copies of newspaper articles from the Bolton Evening News for the 15th and 16th April which indicate the concern expressed by the people of the town.
I should be grateful if you would see a delegation of Councillors and traders in order to discuss the need for some change in legislation or other assistance in order that the traders themselves can have some assurance for their future livelihood, and the residents some equal assurance about the provision of future services.
Unfortunately, Mr. Horrocks has not been prepared to meet anyone to discuss this issue which has led to demands for a change in the law".
After the general election on 11 June I received a reply from my hon. Friend the Member for Surbiton (Mr. Tracey) in his capacity as Minister responsible for planning. He declined to see a delegation, maintaining that these were commercial matters rather than land use planning matters and that his Department could not, therefore, intervene.
I was disappointed by his reply, since the commercial arrangements between landlord and tenant in the scheme are clearly not satisfactory. I have a copy of a lease dated 13 August 1968 between Metrolands Investments Ltd. and a tenant of a shop in the scheme. The lease is full of legal obligations binding the tenants. Any transgression threatens retribution. On the other hand, there is no specific obligation on the landlord to maintain the area, only a provision under clause 1 for the tenant to pay an annual service charge towards
the costs and expenses of maintaining, cleaning and lighting the service roads and pedestrian ways, yards, garden areas and common space included in the Harwood shopping centre.
It is patent that the arrangements for maintenance are implied, but it is equally obvious for all to see that they are not being complied with. For a shopkeeper to take action to prove that the landlord has a legal obligation would be slow and costly, with no certainty of success.
The possibilities of legal and commercial action by the occupiers are tenuous. For neighbouring residents they would seem to be non-existent. Since Metrolands obtained the freehold of the land five years ago, there is now no superior interest to which an appeal could be considered. We have to consider whether any avenues for action are available through the current planning Acts, despite the Minister's claim that land use planning matters are not involved.
A section in the Housing and Planning Act 1986 may be relevant to this case. Section 46 of that Act expands section 65 of the Town and Country Planning Act 1971. Section 65(1) gives the local planning authority powers to serve a notice on owners and occupiers of land and buildings where it appears that the amenity of an adjoining area is adversely affected by the condition of land in their area.
Such a notice should set out steps for remedying the situation and a time scale for complying with the requirement. I would welcome the Minister's clarification of whether the clause applies to all land within a local authority's overall area or only to land that it owns. If local authorities have power to take action under that legislation, they should do so. If the powers in that section are not wide enough, as Bolton council has previously feared, I urge the Minister to extend them to cover these appalling and unacceptable circumstances. Could he ascertain whether that can be done by order or, if not, by inclusion in the earliest relevant Bill?
If not, can he legislate for improved rights for tenants whenever planning permission for a redevelopment is granted? Should compulsory improvement and purchase powers be extended? Twenty-one years ago, in April 1968, the then Bolton Conservative councillor, Robert Horrocks, said:
If the voluntary system fails, improvements should be enforced by the making of compulsory improvement orders. This would prevent areas being spoiled by odd houses being allowed to decay.
Late last year, I succeeded in meeting Mr. Horrocks. appealed to him not to underestimate the strength of local feeling about the state of the precinct, and to pay proper regard to the wishes of tenants and residents. He told me that he was doing all that he could to make progress on the matter.
Unfortunately, my constituents still do not see any sign of progress. After a lone shopper, Mr. Norman Lockton, suffered a severe injury after falling into a large hole which put him off work for seven weeks, the editor of the Bolton Evening News published an open letter to Mr. Horrocks, entitled "Precinct Disgrace". He said:
Derelict, dilapidated and defaced, it is a scandalous monstrosity in one of Bolton's prettiest districts.
In 20 years, the housewife's dream has turned sour. The editor went on to say in his open letter:
Harwood Precinct these days is a desolate deserted ruin. Premises are boarded up, windows are covered with graffiti. It is gaining an unwanted reputation as a haven for glue sniffers and people are afraid to walk through it at night. If a district such as Harwood is to retain its identity, shops and business must be allowed to prosper. People should be encouraged to shop locally rather than be forced into Bolton. Harwood precinct is at the heart of the community and should be thriving, yet it is being slowly strangled to death.
Constituents gathered to meet me at the precinct last Friday. They impressed on me their disgust that one man could so flout the wishes of the community by preventing shopkeepers from trading in premises for which planning permission had been granted. The most seriously inconvenienced are the elderly and the handicapped, who chose to live near the shops, never dreaming that they would then be forced to shut, leaving no immediate facilities.
I should like to know what Mr. Horrocks would have to say to three of my constituents—Mrs. Cummings, Mrs. Styles and Mrs. Fairbairn. Those three mothers have severely handicapped children and went to live near the shops but they are now in considerable difficulties because


of the lack of shops. What has Mr. Horrocks to say to the 30, 40 or more people who have lost their jobs as a result of the traders being evicted?
Bolton metropolitan college sends parties of building students to see how a building should not be put up. Perhaps students of psychology should go to ponder over why one wealthy man should so wish to hold the community in which he lives to ransom, and students of politics go to see such a glaring example of failure of public policy.
I call on the Government to do all in their power to end this scandalous dereliction, to seek new powers if necessary, and to give local authorities the strongest possible directions.
I call on Mr. Horrocks to end this war of attrition in which he is using his wealth as a battering ram. I appeal to him to remember his own words as a councillor 20 years ago which I have just quoted, and to heed the words of the Prime Minister in May 1979:
The Britain I want is a land which cares for the weak, the old and the sick.
Perhaps he might then gain the respect which he fought for, and lost, in the House of Lords 15 years ago.
Must the Government stand by while developers taint their gains with the suffering of the weak, and say that it is just a private matter between landlord and tenants? Is this what the Government gave approval for in 1963? The Minister may say that this is just a little local problem, but that is not how my constituents see it.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) is an assiduous campaigner on behalf of his constituents and I am aware that his success in securing Adjournment debates and action as a result of those debates has been the subject of recent well-deserved favourable comment in the Bolton Evening News. In that context, I congratulate him on once again achieving an Adjournment debate and on raising a subject that is of concern to many of his constituents.
For reasons which I know my hon. Friend appreciates, I am unable to discuss the details of this particular case. But what I can do is to set out generally the powers which exist under both section 46 of the Housing and Planning Act 1986 and the Landlord and Tenant Act 1954, part II.
Section 46 of the 1986 Act is the subject of the debate. Section 46 was merely a vehicle for substituting a new version of section 65 of the Town and Country Planning Act 1971. The latter is the substantive provision and I shall therefore refer to that, rather than to section 46.
Section 65 of the 1971 Act enables local planning authorities to secure the tidying-up of land which is adversely affecting the amenity of a neighbourhood by serving a notice on the owner and occupier obliging them to
remedy the condition of the land".
Such provisions have their origin in Acts of local application and have been incorporated in general legislation since the Town and Country Planning Act 1947. The intention has always been to enable authorities to deal

with unsightly, small plots of open land—seriously overgrown gardens, vacant plots, fly tips and perhaps sprawling scrap yards and the like.
The wording of the provision was widened in 1986 to overcome difficulties in enforcement, but this did not affect the basic intention that the provisions were to be used in respect of small, untidy plots of land and a circular on the 1986 Act explained that the changes had been made in response to difficulties experienced in enforcing notices served under the previous powers; and expressed confidence that authorities would continue to use the powers with discretion, as a means of dealing with relatively isolated, severe cases of neglected or unsightly land.
There are two particular features of section 65 and its supplementary provisions which I should mention. First, the law requires notices to be served on both the owner and the occupier of the land; and secondly there are grounds for appeal to a magistrate's court against a section 65 notice, including the ground that the condition of the land is attributable to, and such as results in the ordinary course of events from, the carrying on of operations or use of land which is not in contravention of planning control. In other words, it provides a protection for the reasonable effects of activities or land uses which have planning permission, whether expressly granted or deemed. That is in accord with the respect which planning law generally accords to existing and established users.
Central Government have never monitored the extent to which local authorities have used these provisions. Given the limited scope of the provisions, there has been no need to do so. We are not talking about large sites of strategic importance, and the tidying up of gardens or small vacant plots has properly been considered a matter of purely local significance.
It is entirely for local authorities to decide where and when to use the powers of section 65. It is not for me to say whether those powers have any relevance to the situation which my hon. Friend has described. If my hon. Friend wishes to pursue the possible use of section 65 powers he should approach the local authority.
Representations made in the context of a current departmental review of derelict land policy have suggested that a new power might be introduced to allow local authorities to improve or reclaim derelict land themselves and to charge the owner. Such a change would amount to a strengthening and wider use of authorities' existing powers to take action themselves in default of compliance with a section 65 order. The idea will be considered, along with other ideas which have come forward, in the derelict land review.
We will need to bear in mind, however, that a power limited to clearing up situations other than those reasonably resulting from activities covered by planning permission would be little different from authorities' existing default powers in relation to section 65 orders; and a power which extended to clearing up the reasonable incidential effects of activities with planning permission would obviously impinge on the long-held respect of planning law for existing users. Such a power would therefore need very strong justification.
It may also assist my hon. Friend if I explain that my Department is responsible for the policy on landlord and tenant business lettings. The main legislation concerning the rights and obligations of business landlords and tenants is set out in part II of the Landlord and Tenant Act


1954. Under the 1954 Act, business tenants have security of tenure and a right to apply for a new tenancy. Unless the tenant has failed to pay the rent, or broken some other condition of tenancy, the landlord can bring the tenancy to an end at or after the end of the current tenancy only if he is entitled to possession of the property. The Act specifies a limited number of grounds for entitlement to possession; these include demolition, reconstruction and redevelopment.
In addition, under the Act, special forms and strict time limits apply if the landlord wishes to seek to end the tenancy. The tenant has the right to request a new tenancy from the landlord and, thereafter, to apply to the court, using special forms and following the time limits laid down by the Act. If the landlord can satisfy the court that he is entitled to possession on one or more of the specified grounds under that Act, the court must grant him possession. If he cannot do so, the court must order a new tenancy for the tenant.
Having listened to my hon. Friend's comments, I have the impression that it is around enforcement and implementation of the provisions of the Landlord and Tenant Act that much of this dispute arises. The landlord wishes to obtain possession so that he can undertake redevelopment. From what my hon. Friend says, it appears that some, or all, of the tenants either are holding out for new tenancies, because they do not believe that there will be development, or wish to remain where they are for other reasons. In the meantime, with some of the tenancies terminated, there are a number of boarded-up properties and general deterioration in the environment.
But I have to say to my hon. Friend that that happens when a large number of tenancies are reaching the end of their period, and the landlord seeks repossession for purposes of redevelopment. It happens in particular when tenancies do not all expire on the same day so that the landlord takes possession over a period.
My hon. Friend may be familiar with what is happening in Horseferry road at present. I refer to Great Westminster house, where a number of shops have been closing down

over a period of several months. That is an example of the effect of the Landlord and Tenant Act in practice. If my hon. Friend is asking us to change that Act to provide a different balance between tenants' interests and landlords' interests, I have to disappoint him. As recently as 1985 we carried out a review of the working of the Act, with particular reference to small business men—both landlords and tenants—and we concluded, after wide consultation, that the Act continues to work well, protecting both tenant interests and landlord interests, and maintaining the balance between landlord rights and tenant rights enshrined in the Act.
If, as it appears from what my hon. Friend is saying, this is largely a dispute over the terms and conditions of tenancies, that must be a matter between the landlord and his tenants. If the tenancy agreement does not contain sufficient provision to protect the quality of the environment until the expiry of the tenancy, that is unsatisfactory. It is not something that the Government can become involved in. It is for the individual landlord and the tenant to negotiate.
I hear what my hon. Friend says about the state of affairs that pertain in this particular part of Bolton. I sympathise with him and his constituents, but I cannot offer any Government solution. I know that my hon. Friend believes that, if there is a problem, the Government should be able to solve it, but I must disappoint him. This is a private contractual problem, not one which the Government can solve.
I am sure that my hon. Friend's speech will have brought this issue to the attention of a larger audience in Bolton. If Mr. Horrocks is not listening to the debate today, he will certainly hear of it. It may well result in pressure being put on him, as my hon. Friend wishes. I congratulate my hon. Friend on raising this issue, but I have to disappoint him in saying that the Government cannot solve this problem.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past One o'clock.